Indirect method: Difference between revisions
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In relation to a | ''Cash flow statements''. | ||
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. | |||
Contrasted with the conceptually simpler Direct method of presentation, which shows all the main categories of gross cash receipts and payments explicitly. | |||
[[File:Cash_flows_-_Direct_v_Indirect_presentation.png|{400}px|400px]] | |||
The indirect method is more widely used in external financial reporting. | The indirect method is more widely used in external financial reporting. | ||
== See also == | == See also == | ||
* [[ | * [[Cash flow statement]] | ||
* [[Direct method]] | * [[Direct method]] | ||
* [[Financial reporting]] | |||
* [[Reconciliation]] | |||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:Cash_management]] | |||
Latest revision as of 13:00, 10 August 2021
Cash flow statements.
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.
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.
