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IAS 7 Statement of cash flows allows entities to present cash flow from operating activities, using either indirect method or direct method. a. Explain why and how the following are adjusted when preparing the statement of cash flows following the indirect method • Depreciation/amortisation • Profit/loss on disposal • Interest receivable/investment income • Finance costs • Change in receivable • Change in inventory • Change in payables. b. The statement of cash flows is an important part of the financial statements. Outline the importance of statement of cash flows

IAS 7 Statement of cash flows allows entities to present cash flow from operating activities, using either indirect method or direct method. a. Explain why and how the following are adjusted when preparing the statement of cash flows following the indirect method • Depreciation/amortisation • Profit/loss on disposal • Interest receivable/investment income • Finance costs • Change in receivable • Change in inventory • Change in payables. b. The statement of cash flows is an important part of the financial statements. Outline the importance of statement of cash flows

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter12: The Statement Of Cash Flows
Section: Chapter Questions
Problem 12.12AMCP
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IAS 7 Statement of cash flows allows entities to present cash flow from operating activities, using either indirect method or direct method. a. Explain why and how the following are adjusted when preparing the statement of cash flows following the indirect method • Depreciation/amortisation • Profit/loss on disposal • Interest receivable/investment income • Finance costs • Change in receivable • Change in inventory • Change in payables. b. The statement of cash flows is an important part of the financial statements. Outline the importance of statement of cash flows
Transcribed Image Text:IAS 7 Statement of cash flows allows entities to present cash flow from operating activities, using either indirect method or direct method. a. Explain why and how the following are adjusted when preparing the statement of cash flows following the indirect method • Depreciation/amortisation • Profit/loss on disposal • Interest receivable/investment income • Finance costs • Change in receivable • Change in inventory • Change in payables. b. The statement of cash flows is an important part of the financial statements. Outline the importance of statement of cash flows
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