How is capital reserve treated in cash flow statement?
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Increase in Balance of Capital Reserve: Increase in the balance ofcapital reserve generally relates to profit/gain on the sale of fixed assets. ... Since, this does not involve any change in the cash balance (inflow/outflow), consequently it won't affect the Cash Flow Statement.
solution-::
Increase in Balance of Capital Reserve: Increase in the balance ofcapital reserve generally relates to profit/gain on the sale of fixed assets. ... Since, this does not involve any change in the cash balance (inflow/outflow), consequently it won't affect the Cash Flow Statement.
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➡The funds constituting the capital reserve account are not used to pay dividends, repurchase shares or engage in other capital return programs. So, No Treatment needs to be carried out in Cash Flow Statement for Capital Reserve. ... The gain on sale of fixed asset is transferred to capital reserve .
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