Statement of cash flows

Previous chapters presented the income statement and the balance sheet; this chapter introduces the cash flow statement. All three statements comprise a set of general purpose financial reports (GPFR). The cash flow statement is useful for users of financial reports, as it provides information to help assess an entity's ability to generate cash flows, meet its obligations and appreciate why assets and liabilities have changed.. This chapter outlines the purpose of the cash flow statement, its relationship to the income statement and the balance sheet, and its general format. Also discussed is the preparation and interpretation of the cash flow statement.