In Illustration 32 Page 6.49 DK Goel Part 3
Why has discount on issue of debentures, underwriting commission and interest on Bank OD not been added back????
Dear student
According to AS-3, Cash Flows from Financing Activities are computed on account of change in the size and composition of the owner's capital. It means any receipt from the Issue of Shares, Debentures, Loan raised etc and payments on Redemption of Shares, Debentures or Loan paid etc during the year are taken into consideration.
In the given question,
i. Issues of Debentures held on the last day of Financial Year i.e. 31st of March, 2016.
ii. Underwriting Commission is for the Issue of Share, which held on the last day of Financial year i.e. 31st of March, 2016.
iii. There is no information regarding Interest on Bank Overdraft.
For these reasons, these items have not been taken into consideration while computing the required information.
Thank you
Regards
According to AS-3, Cash Flows from Financing Activities are computed on account of change in the size and composition of the owner's capital. It means any receipt from the Issue of Shares, Debentures, Loan raised etc and payments on Redemption of Shares, Debentures or Loan paid etc during the year are taken into consideration.
In the given question,
i. Issues of Debentures held on the last day of Financial Year i.e. 31st of March, 2016.
ii. Underwriting Commission is for the Issue of Share, which held on the last day of Financial year i.e. 31st of March, 2016.
iii. There is no information regarding Interest on Bank Overdraft.
For these reasons, these items have not been taken into consideration while computing the required information.
Thank you
Regards