Garden Ltd. acquired fixed assets viz. plant and machinery for 20 lakhs. During the same year it sold its furniture and fixtures for 5 lakhs. Can…

According to Para 21 of AS 3 (Revised) ‘Cash Flow Statements', an enterprise should report separately major classes of gross cash receipts and gross cash payments arising from investing and financing activities, except to the extent that cash flows described in paragraphs 22 and 24 are reported on a net basis. Acquisition and disposal of fixed assets is not prescribed in para 22 and 24 of the standard. Hence, the company cannot disclose net cash flow in respect of acquisition of plant and machinery and disposal of furnitures and fixtures.