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Sir, is there any situation where irrecoverable debts and allowance for irrecoverable debts need to be adjusted in cash flow statement? And what will be the adjustment of employment cost using indirect method?
Irrecoverable debts do not need adjusting for because the receivables at the beginning and end of the year will already be after removing them.
Any allowance for receivables is irrelevant because it is not a cash flow.I am not sure what you mean by ‘adjustment of employment cost’. There is no adjustment for employment cost in the indirect method because the profit that we start with in arriving at the cash flow from operations will already be after employment expenses.
Have you watched my free lectures on Statements of Cash Flows?
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