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Preetham Pai

Preetham Pai

CA Inter

400

30-Aug-20 12:38

37

As 3 cash flow statement

When accounting for an investment in an associate or a subsidiary or a joint venture an investor restricts it's reporting in the cash flow statement to cash flows between itself and the investee/jointventure for example cash flows relating to dividends and advance can you Please explain this

Answers (1)

Madhuri Veluri

Madhuri Veluri

Moderator

31-Aug-20 08:33

Cash flow from investing activities is one of the sections on the cash flow statement that reports how much cash has been generated or spent from various investment-related activities in a specific period. Investing activities include purchases of physical assets, investments in securities, or the sale of securities or assets. Cash flows from interest and dividends received and paid should each be disclosed separately. Cash flows arising from interest paid and interest and dividends received in the case of a financial enterprise should be classified as cash flows arising from operating activities. In the case of other enterprises, cash flows arising from interest paid should be classified as cash flows from financing activities while interest and dividends received should be classified as cash flows from investing activities. Dividends paid should be classified as cash flows from financing activities. For example - Cash receipts from the repayment of advances and loans made to third parties (other than advances and loans of a financial enterprise).