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Accounting Standard: 3

Accounting Standard: 3. Cash Flow Statement. Accounting standard-3 is mandatory for listed companies and entity with a turnover exceeding Rs.50 crore . Accounting standard-3 deals with cash flow during the period from operating, investing and financing activities.

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Accounting Standard: 3

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  1. Accounting Standard: 3 Cash Flow Statement

  2. Accounting standard-3 is mandatory for listed companies and entity with a turnover exceeding Rs.50 crore.

  3. Accounting standard-3 deals with cash flow during the period from operating, investing and financing activities.

  4. Operating Activities: Operating activity are the principal revenue-producing activity that are not investing or financing activities. Enterprises should represent cash flow from operating activities using either direct method or indirect method.

  5. Investing Activities: Investing Activities refer to acquisition and disposal of long term assets and other investment which are not included in cash equivalent.

  6. Financing Activities: Financing activities are those activities that result in changes in the size and composition of owners’ capital and borrowing of the enterprises. Ex: changes in share capital and loan fund.

  7. Extraordinary items should be classified as arising from operating, investing or financing activities.

  8. Disclosure: • Cash and cash equivalent, • Reconciliation of amount in its cash flow with equivalent items, • Significant cash and cash equivalent which are not available for use along with a comment by the management.

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