Indirect method: Difference between revisions
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''Cash flow statements''. | ''Cash flow statements''. | ||
In relation to a Cash flow statement, the indirect method means starting with a reported profit/(loss) figure and then adjusting it to calculate the net cash movement for a period. | In relation to a Cash flow statement, the indirect method means starting with a reported profit/(loss) figure, and then adjusting it to calculate the net cash movement for a period. | ||
Contrasted with the conceptually simpler Direct method of presentation, which shows all the main categories of gross cash receipts and payments explicitly. | Contrasted with the conceptually simpler Direct method of presentation, which shows all the main categories of gross cash receipts and payments explicitly. | ||
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[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
Revision as of 07:27, 1 February 2024
Cash flow statements.
In relation to a Cash flow statement, the indirect method means starting with a reported profit/(loss) figure, and then adjusting it to calculate the net cash movement for a period.
Contrasted with the conceptually simpler Direct method of presentation, which shows all the main categories of gross cash receipts and payments explicitly.
The indirect method is more widely used in external financial reporting.
