Indirect method: Difference between revisions
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''Cashflow statements''. | ''Cashflow statements''. | ||
In relation to a Cashflow statement, starting with a reported profit/(loss) figure and then adjusting it to calculate the net cash movement for a period. | In relation to a Cashflow 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. | |||
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Revision as of 00:35, 1 January 2021
Cashflow statements.
In relation to a Cashflow 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.
