Direct method: Difference between revisions
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* [[Cashflow statement]] | * [[Cashflow statement]] | ||
* [[Financial reporting]] | * [[Financial reporting]] | ||
* [[Gross]] | |||
* [[Indirect method]] | * [[Indirect method]] | ||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
[[Category:Cash_management]] | [[Category:Cash_management]] | ||
Revision as of 12:33, 5 December 2020
In relation to a Cashflow statement, the Direct method shows all the main categories of gross cash receipts and payments explicitly.
Contrasted with the Indirect method, which starts with a reported profit/(loss) figure and then adjusts it to calculate the net cash movement for a period.
The indirect method is more widely used in external financial reporting.
Even though financial reporting standards encourage the use of the direct method.
