Other important points - Ind AS - Indian Accounting Standards - Companies Law

Other important points Non-Cash Items Investing and financing transaction that do not require the use of cash or cash equivalents shall be excluded from an SCF. Such transactions shall be disclosed elsewhere in the financial statements ina way that provides all the relevant information about these investing and financing activities Examples of non-cash transactions are: The acquisition of assets either by assuming directly related liabilities or by means of a lease; The acquisition of an entity by means of an equity issue; and The conversion of debt to equity. Components of cash and cash equivalents An entity shall disclose: The components of cash and cash equivalents Reconciliation between cash and cash equivalents in SCF and the items reported in balance sheet; The policy which it adopts in determining the composition of cash and cash equivalents; and If there is any change in such policy, it should be reported as per Ind AS 8. Disclosures An entity shall disclose, together with a commentary by management, the amount of significant cash and cash equivalent balances held by the entity that are not available for use by the group. There are various circumstances in which cash and cash equivalent balances held by an entity are not available for use by the group. Examples include cash and cash equivalent balances held by a subsidiary that operates in a country where exchange controls or other legal restrictions apply when the balances are not available for general use by the parent or other subsidiaries. Any Additional information may be relevant to users in understanding the financial position and liquidity of an entity. The separate disclosure of cash flows that represent increases in operating capacity and cash flows that are required to maintain operating capacity is useful in enabling the user to determine whether the entity is investing adequately in the maintenance of its operating capacity. An entity that does not invest adequately in the maintenance of its operating capacity may be prejudicing future profitability for the sake of current liquidity and distributions to owners. The disclosure of segmental cash flows enables users to obtain a better understanding of the relationship between the cash flows of the business as a whole and those of its component parts and the availability and variability of segmental cash flows.