8/17/2023 0 Comments Sgh statement of cashflows![]() The IAS 7 further classifies the cash flow statement as, The cash flow statement of any business entity is a central component of financial statements that reflects the information about the company’s financial health and its capacity to generate cash flows. It is one of the major financial statements prepared by any business entity to record the amount of cash and cash equivalents that entered or left the company during the financial period. The statement of cash flow or Cash flow statement can be defined as, This article will talk about the cash flow statement and, most specifically, the operating activities section of any cash flow statement. Therefore, the cash flow statement is one of the four major financial statements any business entity prepares at the year-end. As more companies follow the accrual accounting system, a comprehensive statement is needed to cover the cash transactions of the entity. Therefore, the cash in hand of a company is another story. Since the accrual accounting system focuses on recording a transaction when it happens irrespective of the cash payment or receipt. In other words, the income statement of a business entity does not reflect the actual cash inflows and outflows during a financial year. However, the profit stated does not necessarily mean the cash in hand. The last item on the income statement is profit that tells how much the company has made during a financial period after paying the expenses. If we talk about the income statement alone, the firm’s profitability, revenues, and expenses are covered in it. They include IFRS 10 Consolidated Financial Statements (issued May 2011), IFRS 11 Joint Arrangements (issued May 2011), Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) (issued October 2012), IFRS 16 Leases (issued January 2016) and IFRS 17 Insurance Contracts (issued May 2017).The financial statements of any business entity tell a lot about financial health and profitability. Other Standards have made minor consequential amendments to IAS 7. ![]() These amendments require entities to provide disclosures about changes in liabilities arising from financing activities. In January 2016 IAS 7 was amended by Disclosure Initiative (Amendments to IAS 7). IAS 7 Cash Flow Statements replaced IAS 7 Statement of Changes in Financial Position (issued in October 1977).Īs a result of the changes in terminology used throughout the IFRS Standards arising from requirements in IAS 1 Presentation of Financial Statements (issued in 2007), the title of IAS 7 was changed to Statement of Cash Flows. In April 2001 the International Accounting Standards Board adopted IAS 7 Cash Flow Statements, which had originally been issued by the International Accounting Standards Committee in December 1992. financing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.The aggregate cash flows arising from obtaining and losing control of subsidiaries or other businesses are presented as investing activities. investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents.the indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expense associated with investing or financing cash flows. ![]()
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