Question

Non cash investing and financing activities which may have significant effect on future cash flow are reported ________________.

• A. In the statement of cash flows
• B. In a separate schedule to accompany the statement of cash flows
• C. In the retained earnings statement
• D. In a footnote accompanying the balance sheet

Answer 1

The correct option is B In a separate schedule to accompany the statement of cash flows

As per AS-3, investing and financing transactions that do not require the use of cash or cash equivalents should be excluded from a cash flow statement.

Such transactions should be disclosed elsewhere in the financial statements in a way that provide all the relevant information about these investing and financial activities.

Examples of such transactions are - acquisition of machinery by issue of equity shares, or redemption of debenture by issue of equity shares.