Cash flow Statements or the Accounting standard 3 (AS 3) are additional information for the user of the financial statement.
Cash flow statements exhibit the flow of incoming and outgoing cash. This statement assesses the ability of the enterprise to generate cash and to utilize the cash. This statement is one of the tools for assessing the liquidity and solvency of the enterprise.
This Accounting Standard 3, Cash flow statements, is not mandatory for Small and Medium Sized Companies. However, Such companies are encouraged to comply with the Standard.
