CUET Preparation Today
| Issue of shares in consideration of purchase of plant and machinery results into : |
Inflow of Cash Outflow of Cash Neither Inflow nor Outflow of cash None of the above |
| Neither Inflow nor Outflow of cash |
| 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. Examples of such transactions are – acquisition of machinery by issue of equity shares or redemption of debentures by issue of equity shares. Such transactions should be disclosed elsewhere in the financial statements in a way that provide all the relevant information about these investing and financing activities. Hence, assets acquired by issue of shares are not disclosed in cash flow statement due to non-cash nature of the transaction. |
