By NEAS - 5/1/2018 6:29:36 PM
FA Module 5: The Cash Flow Statement (overview)
(The attached PDF file has better formatting.)
The preceding modules do not have complex computations. But financial statements articulate: double-entry book-keeping causes specific relations among the income statement, the balance sheet, and the cash flow statement. For many items, the entries on any two of these statements determine the entry on the third.
We cover the cash flow statement in two modules:
● Module 5 deals with the structure of the cash flow statement.
● Module 6 covers the articulation of the financial statements.
Reading: chapter 6
● § 2: components and format of the cash flow statement, excluding
○ sub-section 2.3.1 (an indirect-format cash flow statement prepared under IFRS)
○ sub-section 2.3.2 (a direct-format cash flow statement prepared under IFRS)
○ sub-section 2.3.3 (illustrations of cash flow statements prepared under U.S. GAAP)
● § 3: the cash flow statement: linkages and preparation
Know the classification of cash flows and noncash activities
● Operating activities
● Investing activities
● Financing activities
● Differences between IFRS and U.S. GAAP
Final exam problems may ask to compute the operating cash flow, investing cash flow, or financing cash flow. For IFRS cash flows, the exam problem may also specify the firm’s classification.
Know the direct vs indirect cash flow formats for reporting operating cash flow. The textbook has illustrations of both direct and indirect methods from firms using GAAP vs IFRS. The final exam problems are based on the examples in the textbook (not the illustrations of actual financial statements) and the practice problems on the discussion forum.
Working through the illustrations helps you understand the various methods used in practice. The final exam tests the procedures in Exhibit 7 (Acme Corporation).
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By William - 3/9/2023 3:35:18 AM
What is tax receivable here?
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