Knowledge in Commerce on viden.io

Knowledges in Commerce

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Cash Flow Statement

Cash flow statement is concerened with the flow of cash in and out of the organisation. The statement captures both operating results and accompanying changes in the balance sheet. The analysis of the statement is done majorly to determine the short term viability of the organisation to pay the bills. International Accounting Standard 7 (IAS 7) is the standard that deals with cash flow statements. Few of the stakeholders that are interested in the cash flow statement are: 1) Accounting Personnel 2) Potential lenders and creditors 3) Potential Investors 4) Shareholders The cash flow statement has been devided into three components, i.e., cash flow from operations, cash flow from investments and cash flow from financing activities.  Operating activies include those activities that are issential to run the organisation, i.e., purchasing raw material, building inventory, advertising etc. Investing activies on the other hand include purchase and sale of asstes, loans given etc. While financing activities include inflows and outflows related to the investors such as banks and shareholders. Outflows majorly include the interest and dividend given.  There are two methods of preparing the cash flow statement, i.e., Direct Method and Indirect Method. Under Direct Method, statement reports gross cash receipts and payments. There are certain reportings that are done as per the nature of the transaction which cannot be always defined. On the other hand, Indirect Method uses Net-Income as the starting point and then the adjustments are made from the same.  An increase in an asset account is subtracted from net income, and an increase in a liability account is added back to net income. This method converts accrual-basis net income (or loss) into cash flow by using a series of additions and deductions. Apart from this, while prepairing the cash flow statement there are certain rules which one needs to follow and should be clearly understood. Thank You

Chartered Accountancy

Ankur Gupta

Audit overview

Here is a write up for the overview to understand the working of Audit.

Chartered Accountancy

Udbhav Agrawal

AADHAAR made mandatory

he UIDAI will soon evolve a process for authorised employees of banks, post offices and the government to biometrically sign off Aadhaar enrolment and updation form collection, as the process of applying for the 12-digit identifier moves into such premises.  The move is aimed at addressing the security concerns around collection of biometric and other information, Ajay Bhushan Pandey, CEO of the Aadhaar-issuing body, the Unique Identification Authority of India (UIDAI), told . < .. 

Chartered Accountancy

Udbhav Agrawal

Valuation of Supplies under GST

Valuation of Supply GST will be levied on the value of supply. In other words to levy GST, correct value of supply is required. What can be part of the value of supply or what does not form part of the value of supply is very important to levy GST. Definitely determination of value of supply is not so easy but I will try to cover all the valuation rules with practical example to make it easy. Relevant provision for determination of Value of Supply Section 15 of the Central Goods & Service Tax Act and Valuation Rule 27 to 35 Meaning: In general meaning, Value of Supply means consideration charged for the supply from recipient. Example: Mr. X is selling a product for Rs. 1,000 to Mr. B. In this example value of supply will be consideration charged i.e. Rs. 1,000. Definition: The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and theprice is the sole consideration for the supply. [Section 15(1)]. We need to understand four important terms involved in the definition. Transaction Value: – Transaction value is the consideration charged from the recipient for supply. Consideration in relation to the supply of goods or services or both includes–– (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply; Price actually paid or payable: – It means the consideration paid or to be paid by the supplier for the supply. Condition-1: Supplier and Recipient of the supply are not related: Supplier and recipient should not be related party. Definition of related party is as below: Persons shall be deemed to be “related persons” if Such persons are officers or directors of one another businesses; Such persons are legally recognized partners in business; Such persons are employer and employee; Any person directly or indirectly owns, controls or holds twenty-five per cent or more of the outstanding voting stock or shares of both of them One of them directly or indirectly controls the other; Both of them are directly or indirectly controlled by a third person; Together they directly or indirectly control a third person; or They are members of the same family. Condition-2: Price is the sole consideration: Price will be sole consideration if it is on the arm length price. It means if the price charged which is equivalent to Open Market Value or Fair Market Value then the same will be sole consideration. One important aspect is that both the conditions will apply simultaneously. It means if only one condition is dissatisfied then the actual consideration will be value of supply. If the above conditions are not satisfied then value of supply will be determined with the help of valuation rules. Example: Mr. A is selling a product to Mr. B for Rs. 12,000. Open market value of the product is 24,000. Mr. A & Mr. B is unrelated parties. In this case Value of supply will be Rs. 12,000 as single condition is satisfied. Suppose Mr. A & Mr. B is related parties. Then both the conditions are dissatisfied. Hence valuation rule will apply and Value of supply will be Rs. 24,000 for levy of GST. Inclusions & Exclusions from the value of supply: Inclusion in Value of Supply [Section 15(2)]:Exclusion from Value of Supply [Section 15(3)]: &spades; Any taxes, duties, cesses, fees & charges levied under any law other than GST law if charged separately by the supplier; &spades; Any Amount -Liable to Pay – Supplier -Incurred By – Recipient and -Not included in the price actually paid or payable for the supply &spades; Incidental expenses i.e. Packing & Commission etc. &spades; Interest, Late Fee or Penalty for delayed payment. &spades;Subsidies provided by State or Central Government &spades; Discount given before or at the time of supply through invoice. &spades; Discount given after the supply through credit note but -Such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices

Chartered Accountancy

Udbhav Agrawal

Top Down: Why Hierarchies are Here to Stay and How

In spite of all the talk about flatter, looser organisations, top down hierarchies are - and always will be inevitable in the business world. But there are ways to make the hierarchical structure more humane for the people who work in them. This book shows how It argues that every organization today even those that "disguise" themselves as open or flat structures are still hierarchies. Rather than resisting this reality, this is book offers managers realistic ways to "tame" hierarchies to make them more humane, egalitarian places to work. "Top Down" is particularly vacuous commentary on authoritarian hierarchies, as exhibited by corporate America. First, the author wants to make the overwhelmingly obvious point that American corporations are undemocratic hierarchies and that no outbreak of democracy is going to occur anytime soon. Apparently, those comments are meant for idealistic academics, because working people are well aware of the continuing master/slave nature of corporations. Secondly, the author continually flip-flops between discussing hierarchies as authoritarian control structures and as a means of organizing tasks; those are two distinct subjects. Democratic governance does not preclude hierarchies or other organizational forms. Speaking of corporations primarily as hierarchies and not as bastions of authoritarianism verges on dishonesty. Curiously, the author readily admits that authoritarian hierarchies are un-American in their disenfranchisement of people and in subjecting them to a control regime little better than a ruthlessly run feudal estate. Corporate America infantilizes employees, creating fear, dependency, and conformity. The much heralded claim of efficiency is gained at a high cost: the reduction of intelligent beings to timid, tunnel-vision followers. It can hardly be ignored that corporations are constantly going off track, making bad decisions, if not engaging in criminal activities. Perhaps thinking, empowered employees could head off such disasters, even if less "efficient."

Certified Financial Analyst

Abhijeet Dwivedi

management

Management, unlike other subjects such as economics, philosophy, political science is of a recent origin and hence, a relatively new subject. Being an evolving concept (George 1972), it is still in its developing stage. So far as the meaning of management is concerned, like other socio-economic terms, it has also been defined differently by different authorities. As a result, there is no single definition on the term but many. We do not have unified views on what management is precisely. The following are a few of the important definitions of the term ‘management’. Mary Parker Follett views, “Management is the art of getting things done through people (Follett 1941).” According to Henri Fayol (1949) who is considered the father of principles of administrative management, “To manage is to forecast, to plan, to organize, to command, to co-ordinate, and to control.” In the opinion of Fredrick Winslow Taylor (1947), “Management is knowing exactly what you want men to do and then seeing that they do it in the best and cheapest way.” According to George R. Terry (1953), “Management is a distinct process consisting of planning, organizing, actuating, and controlling performance to determine and accomplish the objectives by the use of people and resources.” Peter F. Drucker opines, “Management is a multi-purpose organ that manages business, manages manager and manages workers and work (Drucker 1970).”

Certified Financial Analyst

shreeya arora