Hi,
I found the following formula for computing Operating Cycle as per revised schedule VI in a book:
| OPERATING CYCLE | ||
| PARTICULARS | Months | |
| Average length of Milestone | ||
| Add | Average billing period | |
| Add | Average collection period | |
| Total | - | |
Your views are welcome...
HELLO PRIYADARSHINI,IN WHICH BOOK THIS TYP OF FORMULA IS GIVEN,
HELLO PRIYADARSHINI,IN WHICH BOOK THIS TYP OF FORMULA IS GIVEN,
I got this from a book published by taxmann, sameer..
I got this from a book published by taxmann, sameer..
For the purpose of Schedule VI, ‘Operating Cycle’ stands normally for a period of less than or equal to coming 12 months.
Sometimes, ‘Operating Cycle’ assumption ends by the end of coming Financial year.
If the nature of business Products/Services needs more that 12-months period to get matured ( by receiving receipts / by paying payments ) that period is considered as an ‘Operating Cycle’ in such specific situations. There are this sort of instances, no doubt.
CAclubindia
