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It means Cash Flow prepared as per Accounting Standard -3 as notified by Government
It is compulsory for every Company to Make Cash Flow as per this format
In normal Cash Flow, there are 3 heads
- Sources of Cash
- Uses of Cash
As per AS-3 Cash flow,
These heads are divided into 3 types of Activities
- Operating Activities
- Investing Activities
- Financing Activities
|
Name of Activity |
What Does it Contain? |
|
Operating Activities (OA) |
All items related to Profit & Loss like Operating Profit, Tax as well as Current Assets Current Liabilities |
|
Investing Activities (IA) |
All items related to Fixed Assets and Non Current Assets, Indirect Incomes related to Investment like Interest Income |
|
Financing Activities (FA) |
All items related to Capital, Loan and Interest on Loan |
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1.Take normal Cash Flow Statement and categorize them into 3 types of Activities (OA/IA or FA)
-
Put in 3 heads
- Cash From Operating Activities
- Cash From Investing Activities
- Cash From Financing Activities
Note:-
If it is a Source, Amount will come in positive
If it is a Use, Amount will be negative
- Calculate Cash From All Activities
It means total of Operating, Investing and Financing Activities
Check:- If we have prepared correctly, It Should be equal to Surplus of Cash of Normal Cash Flow
- Add Opening Balance of Cash and Cash Equivalents to Cash From All Activities to arrive at Closing Balance of Cash and Cash Equivalents
This should match with Balance of Cash,Bank and FD as per Balance Sheet
