Where a prior year adjustment (reversal of gratuity provision) is reported in cash flow statement?

Question

Saad Rahim · Answer

Thanks for your kind reply Mr. Haroon.

I know, it has to be reported.

The question is, where?

In adjustments to profits (on top) or in specific head eg: end of service benefits in cash generated from operations or else where?

Please reply!

Haroon Shaukat · Answer

Prior Year adjustment is expenses or income belong to previous years which effect the retained earning balance.

Yes Reversal of gratuity provision should be reporting in cash flow statement of the year