Statement_of_cash_flows_slides

Statement_of_cash_flows_slides - Statement of cash flows...

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Statement of cash flows
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Statement of cash flows Page 2 Typical coverage of US GAAP Purpose and scope Content, format and classification Preparation
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Statement of cash flows Page 3 Executive summary In general, the requirements under IFRS and US GAAP are quite similar. There are some differences with regard to classification among operating, investing and financing activities. The most notable of these are the differences in interest and dividends paid and received: Under IFRS, interest and dividends paid can be classified either as operating or financing cash flows. Interest and dividends received can be classified either as operating or investing cash flows. Under US GAAP, interest paid, interest received and dividends received are all classified as operating cash flows. Dividends paid are classified as financing cash flows.
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Statement of cash flows Page 4 Primary pronouncements US GAAP ASC 230, Statement of Cash Flows IFRS IAS 7, Statement of Cash Flows
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Statement of cash flows Page 5 Progress on convergence In October 2008, the IASB and the FASB issued a joint Discussion Paper (DP), Preliminary Views on Financial Statement Presentation . The objective of the Boards’ joint project is to create a standard that requires entities to organize financial statements in a manner that clearly communicates an integrated financial picture of the entity. The Boards began deliberations in July 2009 and have made tentative decisions as to which proposals in the DP to retain and which proposals to change. Under the proposed model, the statement of cash flows would continue to be segregated into operating, investing and financing cash flow activities. However, the classification of some items within those activities would change. The Boards have tentatively decided to retain the proposal to present all cash flows using the direct method (including operating cash flows) and would require the presentation of an indirect reconciliation of operating income to operating cash flows in the notes to financial statements.
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Statement of cash flows Page 6 Purpose and scope According to ASC 230-10-10-1, “the primary objective of a statement of cash flows is to provide relevant information about the cash receipts and cash payments of an entity during a period.” Cash and cash equivalents are defined. Similar Similar IFRS US GAAP
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Statement of cash flows Page 7 Purpose and scope IFRS IAS 7 applies to all enterprises for each period for which financial statements are presented. US GAAP ASC 230-10-15-4 exempts defined benefit plans and other plans with similar characteristics that present similar financial information, along with certain investment companies, from the scope.
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Statement of cash flows Page 8 Content, format and classification Cash flows are presented in three classifications: operating, investing and financing activities. The totals from the three activities (operating,
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This note was uploaded on 09/30/2010 for the course ACCT 3311 taught by Professor Gregsommers during the Spring '10 term at Southern Methodist.

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Statement_of_cash_flows_slides - Statement of cash flows...

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