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Why is it necessary to identify material non-cash items when completing a cash flow statement?
Wiki User
∙ 16y ago
non cash charges sholud be deducted while arriving cash from operations in second method or indirect method. these non cash charges are deducted in P/L account in order to arrive Net profit. which is in correct. why we are charging depreciation and SBC ( stock based compensation) to the P/L account? based on accounting concepts we have to charge these accounts to the expense side. albiet these are non cash charges these are having effect on P/l account.
I.visweswara reddy
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Wiki User
∙ 16y ago
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