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Cash flow statement doubt

Anu K S (Cleared CA Final) (195 Points)

21 June 2016

If we have an interest income of 100000 on which tds is 10000, what is the amount of interest income to be shown in investing activities? 100000 or 90000?

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CA ABHAY GUPTA (Practice) (3230 Points)
Replied 21 June 2016

show 100000 as income from investment activity and rs 10000 as tax provides in books under cash flow from operating activity..

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Anu K S (Cleared CA Final) (195 Points)
Replied 21 June 2016

in that case 10000 included in 100000 will also get the treatment of interest actually received in cash which is not so. it is provided in AS 3 that only cash inflows or outflows are to be shown in the CFS. then why is this practice followed?

(Guest)

In my view ,Rs 90000 is to be shown in investing activities .

Ruchi (CA) (1410 Points)
Replied 23 June 2016

Agreed with Mansha..... 90000 should be shown under investing activities.

Guru prasath (Employee- Finance) (61 Points)
Replied 28 June 2016

Hi Anu,

Even though we dont receive that 10,000, still it is a cash item and hence it shall be shown as an expenses under operating activities and Rs.1,00,000 shall be shown as an income under investing activities. This will provide better disclosure of financial statements.

Correct me if I am wrong.

Thanks in Advance.