At one of financial affairs statements, the fixed period which has the enterprise & business body and the like (accounting period) the cash base in (the cash and cash equal ones) showing increase and decrease and the balance, the bill which displays the flow of the fund in that period. Structure of cash flow of enterprise is shown.
There is a connected cash flow bill intermediate connected cash flow bill and an individual based cash flow bill intermediate cash flow bill.
Cash in cash flow bill (cash) with, it points to the thing of the cash and cash equal ones. The cash is the cash on hand and payable on demand deposit, any cash equal things call the thing of the short-term investment to which from acquisition day date of maturity or redemption day arrives within 3 months, time deposit and bonds investment etc. of short term are included, the stock and the like which has fluctuation risk is not included.
It is located by thebalance sheet andthe 3rd financial affairs statements which follow to the Profit and Loss Statement, even in US at stock open enterprise stating cash flow bill in the securities report is required from 2000 March period.
The former balance sheet and the Profit and Loss Statement are the financial affairs statements which are drawn up on the basis of the method of thinking the accrued basis, but cash flow bill is based on the method of thinking the cash basis. It keeps appropriating the numerical value which relates to the payment of the cash/collection, last value becomes something which shows cash balance.
, "due to" due to investment activity "due to business operations cash flow in 3 of cash flow financial affairs activity" cash flow "" dividing, it is indicated.
As for cash flow due to business operations, the business operations which the enterprise has done with the flow of the income and outgo is shown. As for cash flow due to investment activity, plant investment and investment etc. to other companies, the flow of the income and outgo with investment activity is shown. Cash flow due to financial affairs activity shows the flow of supply repayment of the fund which is needed in order to maintain both activities of business investment.
Basically, total of cash flow of these 3 division is the cash of one business year of enterprise and increase and decrease amount of cash equal ones, the amount which adds the balance at the beginning of the period of the cash and cash equal ones in this becomes that balance at the term-end.
Cash flow bill , there is a direct method and an indirect method in compilation method. Direct method as in the financing chart with the method of removing only the classification which from the journal relates to the cash and cash equal ones, calculates with the balance of sum total of earnings and expenditure. Indirect method, adjusting several items the base, calculates "the profit" of the Profit and Loss Statement.
There is a merit that, in direct method structure of cash flow becomes easy to understand, the source of income and outgo clear, there is a merit that relation with the profit on the Profit and Loss Statement is easy to grasp, in addition compilation relatively easy in indirect method.
It selects either method, it is selective system, in US and international accounting standard, but because disclosure contents differ in each one, there are times when the numerical value which the stake holder calculates depending upon selection is not indicated.
You can call cash flow bill, that creation ability and payment ability, and efficiency of fund operations of cash flow of the enterprise (something related to investment/the return) it is something which is shown. |
