Section 48 in The Companies (Accounting Standards) Rules, 2006
48. The separate disclosure of cash flows that represent increases in operating capacity and cash flows that are required to maintain operating capacity is useful in enabling the user to determine whether the enterprise is investing adequately in the maintenance of its operating capacity. An enterprise that does not invest adequately in the maintenance of its operating capacity may be prejudicing future profitability for the sake of current liquidity and distributions to owners.
Illustration ICash Flow Statement for an Enterprise other than a Financial EnterpriseThis illustration does not form part of the accounting standard. Its purpose is to illustrate the application of the accounting standard.
