CASH FLOW STATEMENT – AS PER AS 3

.

As per Companies Act 2013, inclusion of Cash Flow Statement in the Financial Statement is mandatory provision for all the companies except some specified companies about which we will discuss later in the article. Our focus for this post will be

1. Applicability of Cash Flow Statement
2. Format for Cash Flow Statement
3. Preparation technique for Cash Flow Statement

.

Let’s start with the Applicability for preparation of Cash Flow Statement.

.

1. Applicability for Preparation of CFS:

As per Companies Act, 2013 each & every company is mandatory to prepare the following:

Balance Sheet

Profit & Loss A/c

Cash Flow Statement

Statement for Changes in Equity

Explanatory note annexed

But some of the companies are eligible to get exemptions from preparation of CFS for the financial year if,

1. It is a OPC i.e. One person Company
2. It is a Dormant Company
3. It is a Small Company. Here Small Company means a company who’s paid up capital is less than 50 Lacs or has turnover less than 2 Crores during the Financial Year. But such exemptions are not available to Subsidiary of a Holding company which has applicability to mandatory preparation of CFS.

2. Format of Cash Flow Statement

Format of Cash Flow Statement as per Accounting Standard – 3

DOWNLOAD

.

3. Preparation technique for Cash Flow Statement

Step 1: Add/Less non-cash items which are already debited or credited in Profit & Less Account from the Profit before Tax.

Step 2: Add/Less changes in working capital from the outcome of Step 1. Increase in Current asset should be deducted & decrease in Current Asset should be added.

Similarly Increase in Current Liabilities should be Added & Decrease in Current Liabilities should be deducted.

Step 3: Deduct taxes paid during the year from outcome of Step 2. This will be your inflow/outflow from the operating activities.

Step 4: Find addition in Fixed Assets from depreciation chart and show it as an outflow. Secondly show outflow for investment during the year. If any asset is sold during the year then show the same as inflow.

Step 5: Show all the loans sanctioned during the year as inflow and repayment as outflow for cash flow from Financing Activities. Deduct Finance Charges debited in the profit & loss account which is added back during cash flow from operations.

Step 6: Add the inflow outflow of all the activities .i.e. from operations, investing activities & financing activities. Add opening cash balance with the result and you will get the closing balance of Cash.

.

That’s all for preparation of CFS. Keep Sharing.

.

REGARDS CA GROUPS

RECENT AMENDMENTS CLASS IN FINANCIAL REPORTING BY CA PARVEEN SHARMA

.

Recent amendments in financial reporting by CA Parveen Sharma. As financial reporting is more of a practical subject and is expected for lesser amendments as comparison to Company Law, Direct taxes & Indirect taxes but there are certain amendments which had come recently. So Parveen Sharma has published a video containing all the recent amendments in financial reporting in 22-minute video.

Every student appearing in the upcoming exams must watch this video as amendments covers about 20-25 marks in each exam. So without wasting any more time watch this amendment video by CA Parveen Sharma.

.

You may Also Like This:-

CA Final Financial Reporting Amendments Notes By Parveen Sharma Sir May 16

CA Final Financial Reporting Amendment Notes By Parveen Sharma May 16

CA Final Financial Reporting Amendments Class & Notes By Parveen Sharma Sir May 16

.

May 2016 exams are about to come and here we are back with amendment notes and video for CA Final Financial Reporting Notes. These notes and video class is provided by Mr. Praveen Sharma Sir. These amendment notes are applicable for May 2016 exams. Some students search on google about CA Final Accounts amendment notes, amendment classes, accounts classes for may 2016 exams & Praveen sharma classes for May 2016 exams so we decided to upload the amendment video classes and amendments notes. So here we go first with the amendment class:-

.

For understanding the amendment class with more clarity download the following files which contains the amendments applicable for may 2016 exams.

.

Amendment Notes for Financial Reporting Notes 1– Download

Amendment Notes for Financial Reporting Notes 2– Download

.

The following contents are included in the amendment notes:-

Topic1 Carve Outs & Other Differences

Topic2 Differences AS & Ind AS

Topic3 Others Ind AS

Ind AS 29 : Financial Reporting in Hyperinflationary Economies

Ind AS 40 : Investment Property

Ind AS 41 :  Agriculture

Ind AS 101 : First-time Adoption of Indian Accounting Standards

Ind AS 104 : Insurance Contracts

Ind AS 106 : Exploration for and Evaluation of Mineral Resources

Ind AS 114 : Regulatory Deferral Accounts

Ind AS 115 : Revenue from Contracts with Customers

Topic4 Accounting and Reporting of Financial Instruments [Based on Ind AS 32, 107 & 109]

.

That’s all for CA Final Financial Reporting Amendments Notes By Parveen Sharma Sir. 

CA Final Financial Reporting Amendment Notes By Parveen Sharma May 16

.

Praveen Sharma Amendment Notes

Every one is asking for Financial Reporting amendment notes for may 16, So we brings you the same  from the best I.e Parveen Sharma Sir, These Notes Contains Class Notes Prepared By Parveen Sharma sir,

Disclaimer : Certain Questions have been selected from Study Material/ Practice Manual of ICAI For the sake of convenience to carry in its classes. This material is not for sale. For internal circulation to registered ALDINE students only

these is provided to us by one of our Links taking Coaching From Aldine and we are sharing the same for the help of you all

So Must Download :-  Financial Reporting Amendment Notes By Parveen Sharma

Praveen Sharma Sir’s  Amendment Notes May 16	Download Now
Parveen Sharma Sir’s Class Notes for CA Final May 16	Download Now

Must Share with others and if you found any problem in downloading the same then must comment , If you also have some notes to share than mail us at cagroups4all@gmail.com

ACCOUNTING ENTRY IN CASE OF REVERSE CHARGE MECHANISM

.

Hey guys. As a part of CA Profession we all know more or less about the reverse charge mechanism. But to memorize the same here is the brief introduction about the reverse charge mechanism.

Usually under Service Tax, Tax is paid by the Service Provider to the government who charges the same in the invoice to service receiver. But in case of reverse charge Government has abolished the responsibility of depositing the service tax from service provider. In case of reverse charge the service receiver has to deposit the service tax directly to the government.

So when tax is paid by the service receiver directly to the government then here comes the question of accounting entry for the same.

So below is the accounting entry in case of reverse charge mechanism by the service tax receiver.

After Invoice of Service provider received by the service receiver.

.

At the time of Booking of Expenses :-

Expenses A/c  Dr. 10000

To Party A/c  Cr. 9000
To TDS Payable A/c Cr. 1000

.

At the time of Payment to the Party:-

Party A/c Dr. 9000
Service Tax Input but not due Dr. 1400

To Bank A/c Cr. 9000
To Service Tax Payable A/c Cr. 1400

.

At the time of Payment of Service Tax:-

Service Tax Payable A/c Dr. 1400
Service Tax Input A/c Dr. 1400

To Bank A/c Cr. 1400
To Service Tax Input but not due Cr. 1400

.

At the time of Payment of TDS:-

TDS Payable A/c Dr. 1000

To Bank A/c Cr. 1000

.

That’s it for Accounting Entry in case of reverse charge mechanism.

You may comment under this post if you have any ambiguity regarding the above accounting entries . Also if you think that there is a mistake or they are incomplete the do comment below to inform us.

CASH FLOW STATEMENT – DIRECT & INDIRECT METHOD

 

Cash Flow Statement also known as Statement of Cash Flows is a statement which shows the Changes in the Cash Position of an organisation between 2 periods. Along with showing the changes in the Cash Position of an organisation, it also depicts the reasons for such change during the period.

The main reason for the preparation of the Cash Flow Statement is that the Income Statement of an enterprise is always prepared on an Accrual Basis and it may show profits in the Income Statement but the Cash received out of these profits may be low to run the business or vice-versa.

PREPARATION OF CASH FLOW STATEMENT

Cash Flows Statement is required to be prepared using International Accounting Standard 7 (or using the Accounting Standard 3 in India). While preparing the Cash Flow Statement, the cash flows during the period are classified into 3 major categories:-

I. Cash Flow from Operating Activities (Direct Method/ Indirect Method)

II. Cash Flow from Investing Activities

III. Cash Flow from Financing Activities

Classification by activities provides information that allows users to assess the impact of those activities on the financial position of the enterprise. This information also helps in evaluating the inter-relationships between these activities.

CASH FLOWS FROM OPERATING ACTIVITIES

Cash Flows from operating Activities are primarily derived from the Principal Revenue-producing activities of the enterprise.

There are 2 methods of preparing the Cash Flows from Operating Activities:-

1. Direct Method
2. Indirect Method

1. CASH FLOW FROM OPERATING ACTIVITY- DIRECT METHOD

While preparing the Cash Flow Statement as per Direct Method, Actual Cash Receipts from Operating Revenues and Actual Cash Payments for Operating Activities are arranged and presented in the Cash Flow Statement. The difference between Cash Receipts and Cash Payments is the Net Cash Flow from Operating Activities under the Direct Method. In other words, it is a Income Statement (Profit & Loss A/c) prepared on Cash Basis under the Direct Method.

While preparing the Cash Flow Statement as per Direct Method, items like Depreciation, Amortisation of Intangible Assets, Preliminary Expenses, Debenture Discount etc are ignored from Cash Flow Statement since the Direct Method includes only Cash Transactions and Non-Cash Transactions are omitted.

Likewise, no adjustment is made for Loss/Gain on the Sale of Fixed Assets and Investments while preparing the Cash Flow Statement as per the Direct Method.

Format for Computation of Cash Flows from Operating Activities as per Direct Method

Particulars	Amount
Cash Receipts from Customers	xxx
Cash Paid to suppliers and employees	(xxx)
Cash generated from Operations	xxx
Income Tax Paid	(xxx)
Cash Flow before Extra-ordinary Items	xxx
Extra-ordinary items	xxx
Net Cash from Operating Activities (Direct Method)	xxx

2. CASH FLOW FROM OPERATING ACTIVITY – INDIRECT METHOD

While preparing the Cash Flow Statement as per the Indirect Method, the Net Profit/Loss for the period is used as the base and then adjustments are made for items that affected the Income Statement but did not affect the Cash

While preparing the Cash Flow Statement as per the Indirect Method, Non Cash and Non Operating charges in the Income Statement are added back to the Net Profits while Non-Cash & Non-Operating Credits are deducted to calculate the Operating Profit before Working Capital Changes. The Indirect Method of preparating of Cash Flow Statement is a partial conversion of accrual basis profit to Cash basis profit. Further, necessary adjustments are made for Increase/Decrease in Current Assets and Current Liabilities to obtain Net Cash Flows from Operating Activities as per the Indirect Method.

Format of Cash Flows from Operating Activities – Indirect Method

Particulars	Amount
Net Profit before Tax and Extra-ordinary items	xxx
Adjustments for
- Depreciation	xxx
- Foreign Exchange	xxx
- Investments	xxx
- Gain or Loss on Sale of Fixed Assets	xxx
- Interest Dividend	xxx
Operating Profit before Working Capital Changes	xxx
Adjustments for
- Trade and Other Receivables	xxx
- Inventories	xxx
- Trade Payable	xxx
Cash generated from Operations	xxx
- Interest Paid	(xxx)
- Direct Taxes	(xxx)
Cash before Extra-Ordinary Items	xxx
Deferred Revenue	xxx
Net Cash Flow from Operating Activities (Indirect Method)	xxx

II. CASH FLOW FROM INVESTING ACTIVITIES

The activities of Acquisition and Disposal of Long Term Assets and other Investments not included in cash equivalents are Investing activities. Separate disclosure of Cash Flows arising from Investing Activities is important because the Cash Flows represent the extent to which expenditures have been made for resources intended to generate future income and cash flows.

Format of Cash Flow from Investing Activities:-

Particulars	Amount
Purchase of Fixed Assets	(xxx)
(Add) Proceeds from Sale of Fixed Assets	xxx
(Add) Interest received	xxx
(Add) Dividend received	xxx
Net Cash Flow from Investing Activities	xxx

III. CASH FLOWS FROM FINANCING ACTIVITIES

Financing Activities are those activities which result in a change in the size and composition of owner’s capital and borrowing of the organisation. The separate disclosure of cash flows arising from financing activities is important because it is useful in predicting the claims on future cash flows by the providers of funds.

Format of Cash Flow from Financing Activities:-

Particulars	Amount
Proceeds from Issue of Share Capital	xxx
Proceeds from Long Term Borrowings	xxx
Repayment of Long Term Borrowings	(xxx)
Interest Paid	(xxx)
Dividend Paid	(xxx)
Net Cash Flows from Financing Activities	xxx

The Comprehensive Format of the complete Cash Flow Statement is as follows:-

Particulars	Amount
Cash flow from Operating Activities (Direct Method/ Indirect Method)	xxx
(Add) Cash Flow  from Investing Activities	xxx
(Add) Cash Flow from Financing Activities	xxx
(=)Net Increase/Decrease in Cash	xxx
(Add) Opening Balance of Cash & Cash Equivalents	xxx
(=) Closing Balance of Cash & Cash Equivalents	xxx

 

Regards
CA GROUPS

STANDARDS ON AUDITING BY SURBHI BANSAL MAM

STANDARDS ON AUDITING BY SURBHI BANSAL MAM

Surbhi Bansal Mam has published Standards of Auditing Notes and CA GROUPS is sharing those Standards of Auditing summary notes with you. These notes on Standards of Auditing are in the same format as Munish Bhandari Sir (and Surbhi Bansal Mam) book. The Standard of Auditing summary notes comprise of the recent changes done to Auditing Standards. Thus these notes are up-to-date and latest for CA IPCC and CA Final students for November 2015 Exams and Onwards.

Click on the image to download the Standards on Auditing Notes by Surbhi Bansal.

From this page you can download the Standards of Auditing Notes (Summary Notes). The file contains only 30 pages and are sufficient for CA Examination Purpose. The Standards on Auditing notes are short and easy to learn (well it is obvious as it is in Bhandari Sir Book’s format).

The notes are really good, paragraphs are divided into small points so they become easy to learn and remember. If you have your own notes to share with the  CA Students you can mail it at : cagroups4all@gmail.com

Latest Notes for IPCC as well as CA Final Exams can be downloaded from this site. Just search (on the right top corner) any notes which you require. If you could not find what you need mail us at the email id mentioned in the above point.

If you have any problem downloading, you can complain below in the comment box. If you need anything else or have any suggestion for us please do comment below. Also give your valuable feedback to us.

ALSO LIKE:

 DOWNLOAD CA IPCC AUDITING AND ASSURANCE STANDARDS NOTES

DOWNLOAD ALL ACCOUNTING STANDARD FOR CA/CS/CWA EXAMS

SOLUTION OF CA FINAL ACCOUNTS PAPER MAY 15

SOLUTION OF CA FINAL ACCOUNTS PAPER MAY 15

Today We are going provide you Solution of CA Final Accounts paper May 15  Exams

THESE  CA Final Accounts paper May 15 SOLUTIONS ARE PROVIDED BY PVT.TUTORS WE DON’T HOLD ANY RESPONSIBILITY FOR THESE SOLUTIONS
SUGGESTED ANSWERS FROM ICAI WILL COME SOON AND WE WILL PROVIDE YOU THE SAME WHEN THEY COME.

For the mean while we are providing you Solution of CA Final Accounts paper May 15 by pvt tutors

Download  the solution From Here :-  CA Final Accounts May 15 Solution

If you Want to download the same for Nov 14 Exams Click Below to download it.

Click here to Download

If You Want all the suggested answers in Your Mail then fill your Email ID below. We will send all the suggested answers directly into your mailbox.

A verification email is sent to your email address After subscribing. So Do confirm your subscription by logging into  your mail account and access all the latest notes and suggested answers in Your Inbox Directly.

Hope you are enjoying the service of CA GROUPS and we will continue to serve you like this in future also so stay in touch and stay connected.

If you have any article with you that you want to share with students then submit them at cagroups4all@gmail.com

We will make sure it will reach max students.

If you dont have papers then you can download it from here

Download CA FINAL PAPER May 15 FROM THE GIVEN LINK BELOW :-

CA Final Papers For MAY 15

If You find Any Mistake in these solution then must share with us .We will try to resolve it soon

SOLUTION OF CA IPCC ACCOUNTS PAPER MAY 15

SOLUTION OF CA IPCC ACCOUNTS PAPER MAY 15

SOLUTION OF CA IPCC ACCOUNTS PAPER MAY 15

Hey fans today we bring for you Solution of CA IPCC Accounts paper May 15  These solution are from Private tutors and not from the ICAI suggested answers. ICAI will release the answers just before the declaration of results. For the mean time enjoy the Solution of CA IPCC Accounts paper may 15.

We hold no responsibility on the accuracy of the answers as these are provided by the private tutors.

DOWNLOAD THE SOLUTION OF CA IPCC ACCOUNTS PAPER MAY 15 FROM HERE – DOWNLOAD

If you don’t have papers then you can download it from here:-

CA IPCC QUESTION PAPERS FOR MAY 2015 EXAMS – DOWNLOAD NOW

If you want all the suggested answers in Your Mail then fill your Email ID below. We will send all the suggested answers directly into your mailbox.

GET NOTES DIRECTLY INTO YOUR MAIL

A verification email is sent to your email address after subscribing. So do confirm your subscription by logging into your mail account and access all the latest notes and suggested answers in Your Inbox Directly.

Hope you are enjoying the service of CA GROUPS and we will continue to serve you like this in future also so stay in touch and stay connected.

If you have any article with you that you want to share with students then submit them at cagroups4all@gmail.com. We will make sure it will reach max students.

If you feel any difficulty or error in downloading the Solution of CA IPCC Accounts paper May 15 then you can share your problem in the comment box given below.

DOWNLOAD ALL ACCOUNTING STANDARDS FOR CA/CS/CWA EXAMS

Today we are giving all Accounting Standards at one place which are useful to all CA,CWA,CS students.and i also given list of standards which are applicable for CA IPCC,Final.These standards are also useful to CWA,CS Students.So they can also download below given files.

CA – IPCC/IPC – Group I
Accounting Standards

• AS 1 : Disclosure of Accounting Policies
• AS 2 : Valuation of Inventories
• AS 3 : Cash Flow Statements
• AS 6 : Depreciation Accounting
• AS 7 : Construction Contracts (Revised 2002)
• AS 9 : Revenue Recognition
• AS 10 : Accounting for Fixed Assets
• AS 13 : Accounting for Investments
• AS 14 : Accounting for Amalgamations

CA – IPCC/IPC – Group II
Accounting Standards

• AS 4 : Contingencies and Events occurring after the Balance Sheet Date
• AS 5 : Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting
• Policies
• AS 11 : The Effects of Changes in Foreign Exchange Rates (Revised 2003)
• AS 12 : Accounting for Government Grants
• AS 16 : Borrowing Costs
• AS 19 : Leases
• AS 20 : Earnings Per Share
• AS 26 : Intangible Assets
• AS 29 : Provisions, Contingent Liabilities and Contingent Assets.

CA Final
Accounting Standards

• AS 1 – Disclosure of Accounting Policies
• AS 2 – Valuation of Inventories
• AS 3 – Cash Flow Statements
• AS 5 – Net Profit or Loss for the Period, Prior Period Items, and Changes inAccounting Policies
• AS 6 – Depreciation Accounting
• AS 9 – Revenue Recognition
• AS 10 – Accounting for Fixed Assets
• AS 12 – Accounting for Government Grants
• AS 14 – Accounting for Amalgamations
• AS 16 – Borrowing Costs
• AS 18 – Related Party Disclosure
• AS 21 – Consolidated Financial Statements
• AS 22 – Accounting for Taxes in Income
• AS 23 – Accounting for Investments in Associates in Consolidated Financial Statements
• AS 24 – Discontinuing Operations
• AS 25 – Interim Financial Reporting
• AS 26 – Intangible Assets
• AS 27 – Financial Reporting of Interests in Joint Ventures
• AS 28 – Impairment of Assets Part 1
• AS 28 – Impairment of Assets Part 2

AS 1 Disclosure of Accounting Policies

AS 2 Valuation of Inventories

AS 3 Cash Flow Statements

AS 4 Contingencies and Events Occuring after the Balance Sheet Date

AS 5 Net Profit or Loss for the period,Prior Period Items and Changes in Accounting Policies

AS 6 Depreciation Accounting

AS 7 Construction Contracts (revised 2002)

AS 8 Accounting for Research and Development

AS 9 Revenue Recognition

AS 10 Accounting for Fixed Assets

AS 11 The Effects of Changes in Foreign Exchange Rates (revised 2003),

AS 12 Accounting for Government Grants

AS 13 Accounting for Investments

AS 14 Accounting for Amalgamations

AS 15 (revised 2005) Employee Benefits

Limited Revision to Accounting Standard (AS) 15, Employee Benefits (revised 2005)

AS 15 (issued 1995)Accounting for Retirement Benefits in the Financial Statement of Employers

AS 16 Borrowing Costs

AS 17 Segment Reporting

AS 18, Related Party Disclosures

AS 19 Leases

AS 20 Earnings Per Share

AS 21 Consolidated Financial Statements

AS 22 Accounting for Taxes on Income.

AS 23 Accounting for Investments in Associates in Consolidated Financial Statements

AS 24 Discontinuing Operations

AS 25 Interim Financial Reporting

AS 26 Intangible Assets

AS 27 Financial Reporting of Interests in Joint Ventures

AS 28 Impairment of Assets

AS 29 Provisions,Contingent` Liabilities and Contingent Assets

Hope you like our dis post.. give ur comments and suggestions...

GOOD LUCK

ALSO READ:

DOWNLOAD CA IPCC AUDITING AND ASSURANCE STANDARDS NOTES