Terms Introduced in the Chapter

For the purpose of the cash flow statement, cash comprises cash in hand and demand depo …

Short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of change in value. Under AS-3, only investments with a short maturity of three months or l …

Transactions that bring cash into the enterprise, that is, a positive cash flow — for example cash received from customers or fr …

Transactions that take cash out of the enterprise, that is, a negative cash flow — for example cash paid to suppliers or for the p …

An item charged in the Statement of Profit and Loss that involves no movement of cash, such as depreciation or goodwill written off. It is added back to net profit when computing cash from operating …

A statement showing the inflows and outflows of cash and cash equivalents during a period, classified into operating, investing and financing activities. Indian companies prep …

The principal revenue-producing activities of the enterprise and other activities that are not investing or f …

The acquisition and disposal of long-term assets and other investments not included in cash equivalents — for example the purchase or sale of fixed assets or investments (and, for a non-financial enterpri …

Activities that change the size and composition of the owners' capital and the borrowings of the enterprise — for example the issue or redemption of shares and debentures (and, for a non-financial enter …

The accounting standard (AS-3, Cash Flow Statements) that lays down how a cash flow statement is to be prepared and presented. It is mandatory for the companies specified …

Items of income or expense that arise from events or transactions clearly distinct from the ordinary activities of the enterprise. Their cash flows are classified as operating, investing or financing as appr …