Cash Flow from Investing Activities Class 12 Notes

Cash Flow From Investing Activities

Cash Flow from Investing Activities includes the flow of cash which arises due to purchase or sale of fixed assets like land, building, plant & machinery, etc. It is an important aspect of growth and capital. It includes only cash transactions and not any credit transactions.

Examples of cash flow that arises from investing activities are:

1. Cash receipts from the sale of fixed assets
2. Payment made in cash to acquire fixed assets
3. Cash advances and loans made to third parties
4. Payments made in cash to acquire shares, warrants, or debt instruments of other enterprises
5. Cash received on account of interests and dividends
6. Receipts in case of insurance claims of third parties
7. Cash receipt from the sale of fixed assets

Cash Flow from Investing Activities: Example 1

Following is the information available from the books of Akash Ltd.

Cash flow from investing activities will be:

Explanation: –

Cash Flow from Investing Activities: Example 2

Cash flow from investing activities from the following information will be:

Explanation: –

Cash Flow from Investing Activities: Example 3

Following is the information available from ABC Ltd

Additional information:
1 Half of the investment held at the beginning of the year was sold at a profit of 2 %.
2 Depreciation on Fixed Assets was Rs 100000 for the year
3 Interest received on investment was Rs 90000
4 Dividend received on investment Rs 70000
Cash flow from investing activities will be:

Explanation: –

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Chapter 6 – Cash Flow Statement

1. Objectives and Benefits of Cash Flow Statement
2. Cash, Cash Equivalents and Cash flows
3. Ascertaining Cash Flow from Operating Activities
4. Ascertainment of Cash Flow from Investing
5. Cash Flow and Financing Activities
6. Preparation of Cash Flow Statement