Indirect method and Transitional service agreement: Difference between pages

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''Cash flow statements''.
''Business acquisitions.''


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.
(TSA).


Contrasted with the conceptually simpler Direct method of presentation, which shows all the main categories of gross cash receipts and payments explicitly.
A transitional service agreement is an agreement between a seller and a buyer of a business.


Under the transitional service agreement the seller continues to provide specified administrative services to the business after its sale, for a an pre-agreed period at a predetermined price.


The indirect method is more widely used in external financial reporting.
Transitional service agreements are useful when the buyer - for example a newer or smaller entity - needs additional time to establish the necessary administrative and back office functions for the acquired business.
 
 
Transition service agreements are sometimes known as ''transition'' service agreements.




== See also ==
== See also ==
* [[Cash flow statement]]
* [[Acquisition]]
* [[Direct method]]
* [[Service]]
* [[Financial reporting]]
* [[Service agreement]]
* [[IAS 7]]
* [[Services]]
* [[Reconciliation]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]

Revision as of 08:08, 1 February 2024

Business acquisitions.

(TSA).

A transitional service agreement is an agreement between a seller and a buyer of a business.

Under the transitional service agreement the seller continues to provide specified administrative services to the business after its sale, for a an pre-agreed period at a predetermined price.

Transitional service agreements are useful when the buyer - for example a newer or smaller entity - needs additional time to establish the necessary administrative and back office functions for the acquired business.


Transition service agreements are sometimes known as transition service agreements.


See also