The Statement of Cash Flows

This chapter looks at 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 to demonstrate changes in an entity's financial position over each accounting period arising from operating, investing, and financing activities. The use of the direct and indirect method of preparing statements of cashflows is also demonstrated. Finally, the chapter provides a list and description of the conventions upon which accounting is based.