The framework for reporting cash receipts and cash payments for the operating section of the cash flow statement under the direct method is shown in Exhibit 16B.1. We consider cash receipts first and then cash payments.
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Saturday, February 9, 2013
Direct Method of Reporting Operating Cash Flows
We compute cash flows from operating activities under the
direct method by adjusting accrual-based income statement items to the
cash basis. The usual approach is to adjust income statement accounts
related to operating activities for changes in their related balance
sheet accounts as follows:
The framework for reporting cash receipts and cash payments for the operating section of the cash flow statement under the direct method is shown in Exhibit 16B.1. We consider cash receipts first and then cash payments.
The framework for reporting cash receipts and cash payments for the operating section of the cash flow statement under the direct method is shown in Exhibit 16B.1. We consider cash receipts first and then cash payments.
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