Sales and purchases are not netted and are reported in the statement of cash flows
as investing activities.
Operating Activities: This section of the statement of cash flows
reports the amount of cash generated or consumed by the operations of the business over a period of time.
In effect, the statement of cash flows
forms a bridge between the two statements, bringing together all transactions that have a cash implication, whether they relate to operating, investing or financing activities, and whether they are revenue or capital in nature.
The Statement of Cash Flows
, often regarded as one of the most important pages in the Annual Report, can be viewed as one of the most flawed and misleading of the financial statements.
Note that this is the total of your statement of cash flows
, so you should check the addition of your statement results in this figure also.
FAS 95 requires that a statement of cash flows
should classify cash receipts and payments according to whether they stem from operating, investing or financing activities.
95, Statement of Cash Flows
, to extend its provisions to NPOs and to expand its description of cash flows from financing activities to include certain donor-restricted cash that must be used for long-term purposes.
The following question related to the Statement of Cash Flows
was part of a recent examination for public accountants.
Quarterly disclosure includes balance sheet, income statement, and statement of cash flows
but does not include a management discussion and analysis.
The Company is also assessing potential restatement of the statement of cash flows
for the 2005 and 2004 quarters.
This contradiction results in a different presentation of changes in cash and financing activity on the statement of cash flows
A relatively recent development has been the Financial Accounting Standards Board requirement to prepare a statement of cash flows