How are the various activities classified (as per AS-3 revised) while preparing cash flow statement?

Explanation

As per Accounting Standard-3 numerous activities of money flow statement ar classified into 3 classes as follows

(i) income from operational Activities - These ar the principal revenue manufacturing activities of the enterprise and alternative activities. The income statement begins with the operational activities section. operational activities usually replicate money generated and/or paid as a results of the firm’s core business functions. below USA accumulation, this class incorporates the money received from customers, paid to suppliers, obtained operational prices, obtained financial gain taxes, received from interest or dividends, and obtained periodic interest prices.

(ii) finance Activities - These ar the acquisition and disposal of long assets, alternative investments not enclosed in money equivalents. money flows from finance activities ar those involving non-current capital assets employed in the firm’s operations, like Property, Plant, instrumentation (PP&E) and intangible assets. once an organization invests in new long capability by deed either PP&E or another company, the investment could be a money outflow from finance activities. Disposals of those styles of assets for money generate inflows.

(iii) finance Activities - These ar the activities that lead to changes within the size and composition of the owner’s capital and borrowings of the enterprise. money flows from finance activities ar those who present itself between a firm and its investors. These embrace each the equity investments of stockholders (owners) and also the loans from bondholders and alternative creditors. once the corporate problems new shares, it records a money influx from finance, and once it repurchases shares, pays dividends or pays off debt, it records a money outflow.