English, Article, Journal or magazine article edition: Preparation and Analysis of Cash Flow Statements: The Net Profit Approach and Operating Profit Approach Jaan Alver

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/183038
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Preparation and Analysis of Cash Flow Statements: The Net Profit Approach and Operating Profit Approach
Author
  • Jaan Alver
Physical Description
  • preprint
Notes
  • A cash flow statement is required as part of a complete set of financial statements prepared in conformity with IFRS as well as US GAAP for all business enterprises. IAS 7 lays down a formal structure for the cash flow statement. Cash flows should be classified under the following three standard headings: “Operating activities”, “Investing activities”, “Financing activities”. The classification of cash flows among operating, investing and financing activities is essential to the analysis of cash flow data. Net cash flow (the change in cash and equivalents during the period) has little informational content by itself; it is the classification and individual components that are informative. Although the classification of cash flows into the three main categories is important, it should be mentioned that classification guidelines are arbitrary. IAS 7 has not indicated how to classify certain items that might fit logically in more than one of the major categories of the statement of cash flows. Examples: 1) Interest and dividends received can be presented as an operating activity, despite their close association with other activities presented as investing activities. 2) Interest and dividends paid can be presented as an operating activity, despite their close association with other activities presented as financing activities. Additional troubles arise from case that there is no standard definition of operating activities and consequently, cash flows from operating activities. Both IASB and FASB have taken position that operating activities are activities that are not investing or financing activities. At the same time the opinion that the association of a cash flow with profit is the primary criterion for classifying the flow as operating, is expressed. The examples illustrate the influence of the differences in the classification of cash flow data on net cash from different kinds of activities.
  • cash flows, IAS 7, SFAS 95.
  • RePEc:ttu:wpaper:127
Language
  • English
Contributed by
OAIster

Get this edition

Other links

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment