During the preparation of the annual report, you are bound to amend some figures or their place on the balance sheet or on the income statement. Being the two main statements, the third one these changes are bound to affect – statement of cash flows – stays neglected. The key thing to remember is the fact that all four statements – balance sheet, income statement, statement of cash flows and statement of changes in equity – are connected. They don’t live their own separate life.

Yes, the statement of cash flows is cash related and if the financial year has already ended there’s nothing you can do anymore about the cash movement, obviously. But, if certain expenses increase due to adjustments made or receivable against group bank account for an example is considered to be as a loan given, you really need to make some rearrangements on the statement of cash flows as well.

It sometimes also happens that from the cash flows you really understand that something isn’t where it’s supposed to be. Like for an example the same group account. If you normally consider it to be your everyday receivable balance, when in fact the balance is always increasing, you will have negative cash flows from operating activities … And all you are actually doing, is giving your free money to joint group account. It’s not really in the first place operating activities related cash flow, is it? And you can understand this from the fact that you are making cash through your operations, thus you shouldn’t have outflow of cash, should you?

So, keep in mind to update the cash flow statement and do think about the operations of the company and whether the statement of cash flows really displays things as it is?