Intermediate Accounting 5 The Statement of Cash Flows Cash Flows from Investing Activities The Cash Flows From Investing Activities section includes all the cash inflows and outflows involved in investing activities transactions of the company Common cash flows from investing activities are-- Receipts from selling investments in stocks and debt securities Receipts from selling property, plant, and equipment Payments for investments in stocks and debt securities Payments for purchases of property, plant, and equipment
Cash Flows from Investing Activities The Cash Flows From Investing Activities section includes all the cash inflows and outflows involved in investing activities transactions of the company. Common cash flows from investing activities are-- Intermediate Accounting 5 The Statement of Cash Flows ➢ Receipts from selling investments in stocks and debt securities. ➢ Receipts from selling property, plant, and equipment. ➢ Payments for investments in stocks and debt securities. ➢ Payments for purchases of property, plant, and equipment
Intermediate Accounting 5 The Statement of Cash Flows Cash Flows from Financing Activities The Cash Flows From Financing Activities section includes all the cash inflows and outflows involved in the financing activities transactions of the company Common financing activities are Receipts from the issuance of debt securities Receipts from the issuance of stocks Payment of dividends Payments to retire debt securities Payments to reacquire stock
Cash Flows from Financing Activities Intermediate Accounting 5 The Statement of Cash Flows The Cash Flows From Financing Activities section includes all the cash inflows and outflows involved in the financing activities transactions of the company. Common financing activities are-- ➢ Receipts from the issuance of debt securities. ➢ Receipts from the issuance of stocks. ➢ Payment of dividends. ➢ Payments to retire debt securities. ➢ Payments to reacquire stock
Intermediate Accounting 5 The Statement of Cash Flows Supplemental disclosures Non-cash investing and financing activities affect an entitys financial position but not the entity 's cash flow during a period should be disclosed in supplemental part to cash flow statement
Supplemental disclosures Non-cash investing and financing activities affect an entity’s financial position but not the entity’s cash flow during a period should be disclosed in supplemental part to cash flow statement. Intermediate Accounting 5 The Statement of Cash Flows
Intermediate Accounting 5 The Statement of Cash Flows 3. Reporting Cash Flow From Operations Operating cycle A company's operating cycle is the average time taken to spend cash for inventory, process and sell the inventory. collect the accounts receivable and convert them back into cas Net income and the net cash flow within the operating cycle are unlikely to be the same because of differences between the timing of the cash flows and the recognition of revenues and expenses
3. Reporting Cash Flow From Operations Operating cycle A company's operating cycle is the average time taken to spend cash for inventory, process and sell the inventory, collect the accounts receivable, and convert them back into cash. Net income and the net cash flow within the operating cycle are unlikely to be the same because of differences between the timing of the cash flows and the recognition of revenues and expenses. Intermediate Accounting 5 The Statement of Cash Flows
Intermediate Accounting 5 The Statement of Cash Flows Two methods FASB allows two ethods for calculating and reporting a company's net cash flow from operating activities Direct method Indirect method
Two methods FASB allows two methods for calculating and reporting a company's net cash flow from operating activities: ✓ Direct method ✓ Indirect method Intermediate Accounting 5 The Statement of Cash Flows