Casflow statements

Accountancy

I did not understood the disadvantages of direct method in casflow statements..

pullagorla sivaram

CA Inter

★ 5

09-Mar-23 09:15

409

Answers (2)

It does not have linkage to net profit. So relationship between profit and cashflows cannot be established.

CA Suraj Lakhotia

Admin

09-Mar-23 19:48

Direct method doesn't reconcile busniess profits and Cash Flow. But , Indirect Method does Reconciliation of Net Profits and Ultimately Cash Flow. Hence , stakeholders may connect company's profits with cash Flow.

Varun Mulay

CA Final

★ 39K+

10-Mar-23 00:35