Purchase of Fixed Assets: Increase in fixed assets or purchase of fixed assets during the accounting year amounts to the outflow of cash. As such, it is shown as outflow of cash in the cash flow statement. However, purchase affixed assets may have to be ascertained by preparing concerned fixed asset accounts on the same lines as prepared under funds flow analysis.
Repayment of Loans: Loans (if any) repaid during the year amounts to the outflow of cash. As such, it is shown as outflow of cash in the cash flow statement. Loans repaid during the year may be ascertained by facilitating comparison of loans outstanding in the last year with those loans in the current year.
Redemption of Preference Shares of Debenture: Preference Shares or Debentures may be redeemed at par, at premium or at discount. Depending upon the circumstances, repayment of preference share capital or debentures is to be considered as outflow of cash on the same lines as discussed under funds flow analysis and shown as outflow of cash in the statement.
In addition to adjustments of depreciation, gain from sale of non current asset etc. made to ascertain Funds from Operations, changes in current assets and current liabilities are to be analysed in relation to their effect on cash as follows
