use of the company or enterprise financial resources reflects the statement of cash flows.It is intended for direct or indirect use of the display during the reporting period, or any other favorite.It displayed arrival with their classification of the main items.This technique allows you to create a general picture of economic activity, to analyze the sources, structure and value of liquidity and solvency.
This document now serves as a standard in the financial statements that recognized international accounting rules, and cash flows.
Unlike traditional accounting statements of this kind has become widely used until the second half of the last century, when the information about the movement of funds of enterprises and organizations began to unify internationally.For the first time the company has used this approach Dowlais Ironworks to reflect the performance reserve funds for the renewal of fixed assets of the enterprise.
Today, a report on the cash flow became obligatory document for use by the United States, and since 1994 it has become an international standard under the name IFRS 7. According to this compilation and submission of such a report was required in the list of documents on the financial statements of any enterprise or organization.
Today almost all the developers claim high standards of reporting the significance of this document.It takes into account cash flows resulting from the main activities, and keeps a record net flow.Just because a report of cash flows has become an essential tool of modern management, allows us to show both external and internal income and expenses.
As standard, the statement of cash flows is to determine:
- sources and the amount of the funds received;
- articles and directions for their use;
- guaranteed to provide the capabilities of the enterprise value of the excess of receipts over disbursements;
- ability to perform the obligations;
- critical value of assets in which an organization or company can continue to conduct business activities;
- the level and the amount of own funds for investment development of the enterprise;
- the sources and causes of the differences between the income and expenditure figures.
This report is compiled by the company or any organization regardless of its industry, type of ownership, size and structural construction.
methodology The report in accordance with IFRS has some features that can not take into account the national rules of writing.In particular, IAS itself based on accounting principles and not legally defined norms stringent accounting.Therefore, the philosophy of the document is not to look at him, or violation of a loophole to circumvent the rules and try to make the document "work."
As is customary, documenting movement of fixed assets divides the inflow and outflow of funds for operating activities of the enterprise - operating, industrial, financial.This approach is necessary, first of all, to the persons concerned were able to adequately assess the impact of these trends work for the overall financial stability of the company.
In drawing up a report on the rules of IAS firms are required to show the information on the structure of funds.This can be used to identify a variety of classifications.For example, in the Russian Federation Report of Cash Flows (Form 4), although it is one of the main accounting reports, nevertheless has some differences from the rules adopted by the IAS.In Russia, a report is generated exclusively by the direct method, because it does not provide for this form of reflection of data on cash equivalents.
