Cash Flow Statement

[saad]

Can any one tell me about direct method and indirect method of CASH FLOW METHOD and what come in investing activities.

[siddharth]

Hi,

Direct and indirect methods are two different methods to compute CASH FROM OPERATIONS alone in statement of cash flows, other parts of statement of cash flows such as CASH FLOW FROM INVESTING ACTIVITIES AND FINANCING ACTIVITIES remains the same under both the methods.

Cash flow from investing activities shows items relating to investments by an entity. For eg 1. An entity makes investments in property, plant, equipments to earn profits, so purchase and sale of the above is an investing activity.

2. An entity makes investments in capital market out of its surplus funds also. So investment in shares, loan notes and dividend, interest therefrom is also a investing activity.

Hope you are clear now

Regards.