Indirect method

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.

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The indirect method is more widely used in external financial reporting.

See also

• Cash flow statement
• Direct method
• Financial reporting
• Reconciliation