1. Issue of bonus shares do not result in cash flow.

2. Debentures are assumed to be redeemed at the end of the accounting year (if date of redemption is not given) so interest is calculated at the opening balance.

3. Debentures are assumed to be issued at the end of the accounting year (if date of issue is not given) so interest is calculated at the opening balance.

4. Non-cash transactions must not be considered for calculating cash inflow/outflow.

5. Discount on issue of shares/debentures must be considered at the time of calculating cash from financing activities, by showing the net amount received only.

6. When there is increase in the value of goodwill, the result is to be shown as cash used in investing activities for purchasing goodwill.

7. When there is decrease in general reserve, the effect should be seen on shares (issued as bonus shares), or declaration and payment of Dividend, and should be considered accordingly.

8. If securities premium reserve has been used to write off Discount on issue of shares/debentures, Preliminary expenses, underwriting commission etc. these items should not be considered.

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