Direct method: Difference between revisions
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In relation to a | In relation to a Cash flow statement, the Direct method shows all the main categories of gross cash receipts and payments explicitly. | ||
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== See also == | == See also == | ||
* [[ | * [[Cash flow statement]] | ||
* [[Financial reporting]] | * [[Financial reporting]] | ||
* [[Gross]] | * [[Gross]] | ||
Revision as of 12:56, 10 August 2021
In relation to a Cash flow 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.
