The major purpose of this study is to determine if nonarticulation for individual accounts between the statement of cash flow
and balance sheet is occurring for publicly traded companies in Hong Kong.
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.
The Statement of Cash Flow
attempts to recognize the "cash movement" of revenue, so the net income amount (which starts with revenue on the Income Statement) is adjusted for the change in accounts receivable.
Each of these three examples highlights the large magnitude of restatements that can occur due to the misclassification of items within the statement of cash flows
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.
Both laymen and accountants who do not work regularly with the Statement of Cash Flows
sometimes find that of all the financial statements, the Statement of Cash Flows
is the most misunderstood and confusing.
Based on the information from your balance sheet and income statement, an accountant can prepare a statement of cash flows
for your company.
The consolidated statement of cash flows
for the nine months ended September 30, 2006 contained a mathematical error, resulting in inaccurate net cash provided by operating activities and accordingly, in the net increase in, and end of period, cash and cash equivalents.
The proceeds from share issue--ie, the $130--go to the "Financing activities" section of the statement of cash flows
19, Reporting Changes in Financial Position, and requires a statement of cash flows
as part of a full set of financial statements for all business enterprises in place of the statement of changes in financial position.