AS - 03 - Cash Flow Statements

AS 3 Mandates Cash Flow Statements for Enterprises, Excludes One-Person, Small, and Dormant Companies

The Accounting Standard (AS) 3 on Cash Flow Statements, under the Companies (Accounting Standards) Rules, 2021, mandates enterprises to prepare cash flow statements as part of their financial statements, except for one-person, small, and dormant companies. The standard aims to provide users with information on cash flow changes from operating, investing, and financing activities, aiding in assessing an enterprise's ability to generate cash. It requires separate disclosure of cash flows from these activities and offers guidance on presentation methods, including direct and indirect methods, foreign currency transactions, extraordinary items, and non-cash transactions.