1. AS 3 :CASH FLOW STATEMENT (REVISED)
[EFFECTIVE DATE : 1ST APRIL ]
issued by
THE INSTITUTE OF CHARTERED ACCOUNTANT OF INDIA
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Presented by
DEEPAK SINGH KUSHWAHA

2. INDEX INTRODUCTION BENEFITS HISTORY APPLICABILITY FEATURES DEFINITIONS
PRESENTATION of CASH FLOW STATEMENT
Operating activity
Investing activity
Financing activity
METHODS
TREATMENT of certain items in cash flow statement
DISCLOSURES of cash and cash equivalents
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3. INTRODUCTION
It is additional information to the user of financial statement.
It exhibit the flow of incoming & outgoing cash.
It access the ability of enterprise to generate cash & utilize it.
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4. BENIFITS
Enables the users to evaluate the changes in net assets of the enterprise , it financial structure (including liquidity & solvency).
Useful in assessing the ability of enterprise to generate cash & cash equivalent.
Useful in examining relationship b/w profitability and net cash flow and the impact of changing prices.
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5. HISTORY In June 1981 ,the recommendatory
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In June 1981 ,the recommendatory
AS 3 : CHANGES IN FINANCIAL POSITION(commonly known as Fund Flow Statement) was issued.
In 1997 it was replaced by AS 3 : CASH FLOW STATEMENT which is mandatory in nature for level I enterprise but recommendatory for level II & level III enterprise w.e.f 1st April 2001.
All listed Co.’s in India are required to prepare & present cash flow statement BY INDIRECT METHOD.

6. APPLICAPABILITY This standard applies to the following entities:
Enterprises whose equity or debt securities are listed whether in India or outside India.
which have turnover of more than 50Cr.
Borrowing more than 10Cr at any time during the immediately preceding a/cing period.
Bank & Insurance Co.
Any enterprise which doesn’t present a cash flow statement should disclose the fact.
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7. FEAUTURES
CFS explains cash movement under foll. 3 heads namely:
Cash flow from Operating Activity
Cash flow from Investing Activity
Cash flow from Financing Activity
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8. D E E L A X DEFINATION CASH CASH & CASH EQUIVALENT CASH FLOW
OPERATING ACTIVITY
INVESTING ACTIVITY
FINANCING ACTIVITY
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9. PRESENTATATION OF CASH FLOW STATEMENT OPERATING ACTIVITY
CASH INFOW
CASH OUTFLOW
Cash ---Sale
Received from debtors
Received from commission,royalty,fees
INCASE OF FINANCIAL CO.
Cash recevied from interest & dividend
Sale of securities
Cash --- purchase
Pay to creditor
Payment of wages
Operating expenses
Income tax
INCASE OF FINANCIAL CO.
Cash paid for interest.
Purchase of securities
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10. INVESTING ACTIVITY CASH INFOW CASH OUTFLOW Sale of investment
Interest received
Dividend recevied
Sale of fixed asset
Purchase of fixed asset
Purchase of investment
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11. FINANCING ACTIVITY CASH INFLOW CASH OUTFLOW Issue of share in cash
Issue of debt in cash
Proceed from long term borrowing
Payment of loan
Redemption of pref. share
Buy back of equity share
Payment of dividend
Payment of interest
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12. METHODS D E E L A X DIRECT METHOD :
In this method ,gross receipt & gross payments of cash are disclosed.
INDIRECT METHOD
In this method , P/L a/c is adjusted for the effect of transactions of Non cash nature.
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13. TREATMENT OF CERTAIN ITEMS IN CASH FLOW STATEMENT
INTEREST ,
DIVIDEND,
INCOME TAX,
CASH FLOW RELATING TO INVESTMENT IN ASSOCIATES,SUBSIDIARIES & JOINT VENTURE,
NON CASH TRANSACTIONS,
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14. DISCLOSURE
An enterprise should disclose the amount of significant cash & cash equivalent balance held by enterprise that are not available for the use by it with explanation of management.
An enterprise should disclose the components of cash & cash equivalent .
An enterprise should present a reconciliation of the amount in the cash flow statement with the equivalent items reported in the balance sheet.
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15. THANK UUUUU……………
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