DEAR SIR
TREATMENT OF ACCRUED INCOME IN CASH FLOW STATEMENT IN OPERATING ACTIVITIES
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 06 October 2013
Dear Firoz,
Accrued Income is classified under Current Assets therefore while preparing Cash Flow Statement it will be part of Change in Working Capital which is further grouped under Cash Flow from Operating Activity.
BUT if such Accrued Income is generated from some Investment Assets which is not operational activity of business than it is better to group such income under Cash flow from Investing activity.
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 06 October 2013
In Cash Flow from Operating Activity
Increase in Accrued Income will reduce balance of Cash from Operating Activity and vice versa
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