● Two Balance Sheet requires.
● No need of Profit & Loss account in Indirect Method.
● Non Cash Item require.
● We need change in current Assets & Current Liabilities account.
● No need to open, Opening current assets and current Liabilities accounts.
Format
(Indirect Method): Given by AS-3
| M/s XYZ LIMITEDCash flow Statement for the year ended 31 March 2014 | |
| Particulars | Amount |
| Cash Flows from Operating Activities (Schedule- 1) | XX |
| Cash Flows from Investing Activities (Schedule- 2) | XX |
| Cash Flows from Financing Activities (Schedule-3) | XX |
| Extraordinary Items | XX |
| Net Profit before Tax → | XX |
| Income Tax Paid → | XX |
| Net Increase or Decrease in cash or cash Equivalents → | XX |
| Add: Cash & Cash Equivalents at the beginning of the period → | XX |
| Cash and Cash Equivalents at the end of the period → | XXX |
Schedule-1
Cash flow from operating activities
| Particulars | Amount |
| Changes in Profit & Loss account | XX |
| Changes in Reserve (Any) | XX |
| (+) Interim Dividend | XX |
| Net Profit → | XXX |
| Non Cash Items: | |
| (+) Depreciation | XX |
| (+) Loss on Sale of Fixed Assets | XX |
| (+) Goodwill Amortization | XX |
| (+) Preliminary Expenses written off | XX |
| Non Cash Incomes: | |
| (-) Gain on Sale of Fixed Assets | XX |
| Operating Profit before working Capital changes → | XXX |
| ± Changes in Current Assets & Current liabilities | XX |
| Cash operating Expenses before Tax | —— |
| Tax Paid | XXX |
| X | |
| Cash Flow from Operating Activities → | —— |
| XXX | |
Schedule-2
Cash flow from investing activities
| Particulars | Amount | |
| Cash received for: | ||
| – Sale of Fixed Assets | XX | |
| – Sale of Investment | XX | |
| – Interest received | XX | |
| – Dividend received | XX | XXX |
| Cash paid for: | ||
| – Purchase of Fixed Assets | XX | |
| – Purchase of Investments | XX | XX |
| Net Cash Flow from Investing Activities → | XX |
Schedule-3
Cash flow from financing activity
| Particulars | Amount | |
| Cash received for: | ||
| – Issue of Equity Shares | XX | |
| – Issue of Preference Share | XX | |
| – Long-term borrowings | XX | XXX |
| Cash paid for: | ||
| – Interest paid | XX | |
| – Redemption of Preference shares | XX | |
| – Repayment of Loans | XX | |
| – Dividend paid | XX | |
| – Purchase of Investments | XX | XX |
| Net Cash Flow from Financing Activities → | XX |
