What is a statement of cash flow?

• Reports information regarding cash inflows and cash outflows for a particular period of time
• Prepared on a cash basis, not an accrual basis
• Concerned with the timing of cash receipts and payments, not the timing of the underlying transactions

• Classified into three main sections reflecting the major cash flow activities
• Operating activities (income statement items, current assets & liabilites)
• Investing activities (non current assets)
• Financing activities (non current liabilities and equity)

Cash flow statement can be presented in direct or indirect format.

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