Archive | Financial Statement

Preparation of Financial State­ments | Company

The latest regulations regarding preparation of financial state­ments issued by IRDA are: 1. Cash Flow Statement (Common for All Insurers): Insurers will in addition to the earlier statutory and subsidiary books of accounts and statements, will have to prepare a receipts and payments account (cash flow statement). This statement must be prepared in accordance with […]

Fund Flow Statement and Balance Sheet: Differences | Accounting

The upcoming discussion will update you about the difference between fund flow statement and balance sheet.  Difference # Fund Flow Statement: 1. It is dynamic in nature. It shows the changes in financial position between two dates. 2. It incorporates items causing changes in working capital. 3. It is a management tool for financial analysis […]

Preparation of Financial Statements | Insurance Business

The following are some of the basic provisions for preparation of financial statements of insurance business:  Application of Accounting Standards: Every Balance Sheet, Receipts and Payments Account [Cash Flow Statement] and Profit and Loss Account [Shareholders’ Account] of the insurer shall be in conformity with the Accounting Standards (AS) issued by the ICAI, to the […]

Classification of Cash Flow Statement | Accounting

A cash flow statement aims to determine the effects of cash of different type of cash inflows and outflows. In this process, all cash flows are classified into three categories:- 1. Cash flows from Operating Activities 2. Cash flows from Investing Activities 3. Cash flows from Financing Activities. 1. Cash Flows from Operating Activities: The […]

Cash Flow Statement (As per AS 3) | Accounting

In this article we will discuss about:- 1. Introduction to Cash Flow Statement 2. Meaning of Cash Flow Statement 3. Definition 4. Objectives 5. Scope 6. Benefits. Introduction to Cash Flow Statement: In June 1981, the Institute of Chartered Accountants of India issued Accounting Standard 3: Changes in Financial position. This accounting standard dealt with […]

Cash Flow Statement: Uses and Limitations | Accounting

In this article we will discuss about the uses and limitations of cash flow statement. Uses of Cash Flow Statement: A Cash Flow Statement is of primary importance to the financial management. It is an essential tool of short-term financial analysis. Its main uses are as follows: 1. Cash Flow Statement facilitates to prepare sound […]

Cash Flow Statement: Problems and Solutions | Accounting

Here is a compilation of top three accounting problems on cash flow statement with its relevant solutions. Problem 1: From the following summary of Cash Account of X Ltd., prepare Cash Flow Statement for the year ended 31st March 2007 in accordance with AS-3 using the direct method. The company does not have any cash […]

Preparation of Cash Flow Statement (With Example)

In this article we will discuss about the preparation of cash flow statement, explained with the help of suitable illustrations. The Cash Flow Statement should report cash flows during the period classified by operating, Investing and Financing Activities. An enterprise presents its cash flows from operating, investing and financing activities in a manner which is […]

Funds Flow Statement: Importance and Limitations | Accounting

In this article we will discuss about the importance and limitations of funds flow statement.  Following are the uses of this which show its importance: 1. Fund Flow Statement determines the financial consequences of business operations. It shows how the funds were obtained and used in the past. Financial manager can take corrective actions. 2. […]

Fund Flow Statement: Problems and Solutions | Accounting

Here is a compilation of top six accounting problems on fund flow statement with its relevant illustrations. Problem 1:   From the following information relating to A Ltd., prepare Funds Flow Statement: Problem 2:  Ramco Cements presents the following information and you are required to calculate funds from operations:   Problem 3:   The Balance […]

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