CASH FLOW STATEMENT

CASH FLOW STATEMENT
                                                 In finicial accounting cash flow statement also known as statement of cash flow or fund flow statement.This statement shows how much cash come in business or out flow from the business.

                                         METHODS
                                 there are two mathods of recording cash flow

1. DIRECT METHOD
2.IN DIRECT METHOD

We commonly use indirect method the explanation of this is given below

                                           INDIRECT METHOD
In indirect method there are three activities that are given below

1. Operating activity
2.Investing activity
3.Financing activity

                                              Operating activity
Following are including in the operatin activity

.Accout reciveable
.Account payable
.Inventory
.Prepaid expense
.Outstanding expense

                                         Investing activity
Following are including in investing activing
Maketable securities
.Purchase of asset

                                        Financing activity
Following are included in financing activity

.Owner invest in business
.Shares issu
.Loan recived


.
.Unearned revenue

Property,Plant and equipment and tangible assets

Definition of PPE items :
                                                    IAS 16 defines PPE as tangible items that are

1. Use for production or supply of goods purpose,for rental to others.
2.Its expected life must be more than one years.

Measurement of PPE:
                                   for the measurement of PPE value following costs are included.

1.The cost of purchase,less any trade discount,add import duties and non refundable sales tax.
2.All costs that are incurred to bring the asset to the location and condition necessary for capable of use.
3.payments made to labor to install the asset.
4.Site preparation costs.
5.Fees paid to professional to install the asset.
6.Any other cost that is directly associated with asset.

           Any abnormal loss that occur due to late start of working by company cannot be included.

Depreciation of Asset:
                                    depreciation explain the benefit that is get from the asset.

REVALUATION AND DERECCONGNITION


REVALUTION
                          It means that revalue the value of asset. valu of asset may increase or decrease after the revaluation.

REVALUATION GAINS
                                         If loss on asset after revaluation already to income statement than gain on asset also transfer to income statement.
REVALUTION LOSS
                                     Ifthere is loss after revaluation and gain also transfer to equity than loss is also transfer to equity.