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 \u2013 statement of cash flows \u2013 stays neglected. The key thing to remember is the fact that all four statements \u2013 balance sheet, income statement, statement of cash flows and statement of changes in equity \u2013 are connected. They don\u2019t live their own separate life. <\/p>\n
Yes, the statement of cash flows is cash related and if the financial year has already ended there\u2019s 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.
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\nIt sometimes also happens that from the cash flows you really understand that something isn\u2019t where it\u2019s 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 \u2026 And all you are actually doing, is giving your free money to joint group account. It\u2019s 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\u2019t have outflow of cash, should you? <\/p>\n
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?<\/p>\n","protected":false},"excerpt":{"rendered":"
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 \u2013 statement of cash flows \u2013 stays neglected. The key thing to remember is the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,50],"tags":[],"class_list":["post-1781","post","type-post","status-publish","format-standard","hentry","category-4-reporting","category-4-5-statement-of-cash-flows"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/1781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=1781"}],"version-history":[{"count":3,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/1781\/revisions"}],"predecessor-version":[{"id":2517,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/1781\/revisions\/2517"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=1781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=1781"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=1781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}