3488972
Description
Mind Map by Sophie Ann Jones, updated more than 1 year ago
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Created by Sophie Ann Jones
about 9 years ago
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Main purpose and element of the Statement of Cash Flow
- DIRECT METHOD
- Cash Received
from customers
- Cash Paid to suppliers
- Cash paid to employees
- Cash paid for
operation
expenses
- Interest Paid
- Taxes Paid
- Dividends Paid
- Net cash
from
operating
activities
- Cash Received
from customers
- INDIRECT METHODS
- The net cash flow from operating activities is determined by
adjusting profit or loss for the effects of:
- Changes during the period in inventories and operating receivables and payables
- Non-Cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and losses, and
undistributed profits of associates
- All other items for which the cash effects are investing or financing cash flows.
- All other items for which the cash effects are investing or financing cash flows.
- Non-Cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and losses, and
undistributed profits of associates
- Changes during the period in inventories and operating receivables and payables
- The net cash flow from operating activities is determined by
adjusting profit or loss for the effects of:
- To provide information about a company's
gross receipts and gross payments for a
specified period of time.
- The gross receipts and gross payments will be reported in the
cash flow statement according to one of the following
classifications: operating activities, investing activities, and
financing activities
- Operating: The sources and uses of cash in the operating section
come from revenue, expenses, gains, losses, and other costs.
- Investing: This section shows sources and uses of cash from debt and equity purchases and
sales; purchases of property, plant, and equipment; and collection of principal on debt.
- Financing: You report activities such as long-term liability (paying or securing loans
beyond a period of 12 months from the balance sheet date) and equity items (sale of
company stock and payment of dividends) in the financing section.
- Operating: The sources and uses of cash in the operating section
come from revenue, expenses, gains, losses, and other costs.
- The gross receipts and gross payments will be reported in the
cash flow statement according to one of the following
classifications: operating activities, investing activities, and
financing activities
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