IAS 7 :CASH FLOW
STATEMENTS
Lesson
,Introduction
Cash flow Statement (CFS) is an
additional information provided to the
users of accounts in the form of an
statement, which reflects the various
sources from where cash was
generated(inflow of cash) by an
enterprise during the relevant
accounting year and how these inflows
were utilised (outflow of cash) by the
enterprise.
, Importance of CFS
This helps the users of accounts:
♦ To identify the historical changes in the flow of cash & cash
equivalents.
♦ To determine the future requirement of cash & cash
equivalents.
♦ To assess the ability to generate cash & cash equivalents.
♦ To estimate the further requirement of generating cash &
cash equivalents.
♦ To compare the operational efficiency of different enterprises.
♦ To study the insolvency and liquidity position of an enterprise.
STATEMENTS
Lesson
,Introduction
Cash flow Statement (CFS) is an
additional information provided to the
users of accounts in the form of an
statement, which reflects the various
sources from where cash was
generated(inflow of cash) by an
enterprise during the relevant
accounting year and how these inflows
were utilised (outflow of cash) by the
enterprise.
, Importance of CFS
This helps the users of accounts:
♦ To identify the historical changes in the flow of cash & cash
equivalents.
♦ To determine the future requirement of cash & cash
equivalents.
♦ To assess the ability to generate cash & cash equivalents.
♦ To estimate the further requirement of generating cash &
cash equivalents.
♦ To compare the operational efficiency of different enterprises.
♦ To study the insolvency and liquidity position of an enterprise.
