When both general reserve and capital redemption reserve is given in balance sheet and no adjustment is given in notes related to them, then why they are not adjusted in cash flow from operating activ

Question

Vanshika · Answer

So if crr had opening balance then both their differences are to be shown?

Riya · Answer

See if crr is created like in illstration 11 crr was not there in previous years that mean we have created crr . So we can assume Or ,can show effect once by subtracting and than adding

Vanshika · Answer

Also every time we will have to assume this when both of them are given?

Vanshika · Answer

Thanks Riya for clarification because even my sir told me to do it this way but I was still confused that why did it happen.

Riya · Answer

General reserve To p and l ----------- less cash flow P and l To crr -------------- add cash flow Still no effect

Riya · Answer

Orr we can say that

Riya · Answer

My sir said here icai assumed that the amount of general reserve is transferred to crr So no effect on cash flow Gr To crr

Lakshay · Answer

Transfer to general reserve ko add krte hai net profit before tax and extraordinary item mai isme toh kam ho rha hai general reserve toh isliye kuch nhi krna

When both general reserve and capital redemption reserve is given in balance sheet and no adjustment is given in notes related to them, then why they are not adjusted in cash flow from operating activ

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