The statement of cash flows

This chapter considers the statement of cash flows, which presents users of financial information with details of cash inflows and outflows for an accounting period. It shows how the statement of cash flows links together the statement of profit or loss and the statement of financial position. It demonstrates the changes in an entity’s financial position over each accounting period arising from operating, investing and financing activities. In addition, it covers the preparation of simple statements of cash flows using both the direct and indirect methods. Other topics covered include the accounting conventions applied and that profit does not equal cash.