The Patents of X Ltd. increased from Rs. 3,00,000 in 2013-14 to Rs. 3,50,000 in 2014-15. What will be its treatment while preparing Cash Flow Statement for the year ended 31st March 2015?

SOLUTION

It will be taken as purchase of Patents of Rs. 50,000 and will be shown under Cash Flow from Investing Activities as an outflow of cash.