MGCR 211 Lecture Notes - Lecture 22: Cash Flow, Income Statement, Current Asset
9 Feb 2018
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Document Summary
Statement of cash flow (chapter 13) - 22/11/16. Ifrs vs gaap : both are accepted in final, but needs to be justified. Formats for operating cash flows : direct method , lists cash receipts and cash payments for each major operating activity, identifying which are operating, and then distinguish between payments and collections, ifrs favours this method, very time-consuming. Indirect method : most companies use this method, easier to implement because it works directly with changes in. Depreciation/amortization/depletion : has no current cash effect but is deducted on the income statement when using accrual basis net income, the add-back cancels the earlier deduction. Losses on sale of long-term assets : it is not an operating activity - it is an investing activity. Decreases in current assets : a decrease in a current asset indicates an increase in cash, because you sell the asset for cash.
