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Answer Posted / anudeep
cash flow statement is prepared according to accounting
standard 3.
in cash flow we need to clasify accounting information into
operating activities and invesment activities and financial
activities
before going to prapare first we need to understand what is
the motive of the cash flow statement
cash flow statement can be prepared by using either direct
method or indirect method
but accounting standard 3 recommends only indirect method
but in case of insurance companies as per insurance
companies act,1938 cash flow statement should be prapared
acording to direct method.
for more details see accounting standard 3
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