What treatment should be done for short term provisions in cash flow statement when no information or notes is given?

Question

Answer

Opening will added in operating activity and closing will subtract from financing

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When no information or notes is given then short term provision is treated as operating activity and added in appropriation for adjustment to findout net profit before tax

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Cash Flow Statement: Treatment for Short-term Provisions

Introduction:
In the absence of information or notes, determining the treatment for short-term provisions in the cash flow statement can be challenging. However, by analyzing the nature of the provisions and considering general accounting principles, we can provide guidance on how to treat these items in the cash flow statement.

1. Understanding Short-term Provisions:
Short-term provisions typically refer to current liabilities arising from obligations or potential liabilities that are expected to be settled within the next year. These provisions are often created to account for uncertain events or transactions that may have financial implications for the company.

2. Classification in Cash Flow Statement:
Short-term provisions are generally classified as operating activities in the cash flow statement. This is because they typically arise from ongoing operations and have an impact on the company's day-to-day cash flows.

3. Operating Activities:
Within the operating activities section, short-term provisions should be presented under the appropriate subcategories such as:

a. Cash Inflows:
If a provision is reversed or settled, resulting in a decrease in the liability, it should be classified as a cash inflow under operating activities. This indicates that cash has been received or saved from the settlement of the provision.

b. Cash Outflows:
On the other hand, if a provision is created or increased, resulting in a higher liability, it should be classified as a cash outflow under operating activities. This indicates that cash has been utilized or set aside for potential future payments related to the provision.

4. Disclosure:
While no specific information or notes are provided, it is important to disclose the nature and purpose of the short-term provisions in the accompanying notes to the financial statements. This provides transparency and assists users in understanding the impact of these provisions on the company's cash flows.

Conclusion:
When dealing with short-term provisions in the absence of specific information or notes, it is essential to analyze the nature of the provisions and apply general accounting principles. By classifying short-term provisions under operating activities and disclosing relevant information in the accompanying notes, companies can provide a comprehensive representation of their cash flows.

Answer

Which type provision tax or any other

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