IN LECTURE 3 OF CASH FLOW STATEMENT
for calculating cash flow from operating activities why did you consider Revaluation loss, revaluation profit, profit on sale of investment, loss on sale of investment in PL A/C ?
we need to treat it as Capital Loss or Capital gain item and we must set of capital loss item against capital reserve !
These are non-cash gains/losses which need to be considered for arriving at cash flow from operating activities from Net profit.
Hope you got it!
My question was revaluation profit or loss should be adjusted from capital reserve as they are non recurring items
So why it was considered in PL ?
If the question mentions that the profit has been arrived after considering these items, then we have to adjust the same.
So here if question says, we consider these items as PL items.
Otherwise in general we need to adjust these items with capital reserve..!
Am I right ?
Yes, you may do so.
Add a note for the same.