Office ToDo

What are those “changes” under operating cash flows?

Karl — Wed, 22 Feb 2012 06:10:00 +0000

On the statement of cash flows under operating activities you have the “changes in receivables”, “changes in inventory” etc. When you see those lines, you know the cash flows are presented using the indirect method. The direct method is always used for investing and financing activities, but can be used for operating as well. However, [...]

Under which activity should the paid interest be classified?

Karl — Mon, 20 Feb 2012 06:08:04 +0000

Interest paid on the statement of cash flows can be disclosed either under operating or financing activities. No doubt you have seen both being used and it would make sense to have them either under one or the other. None of these is wrong actually and we will explain why. Operating activities and cash flows [...]

Ask yourself the question „Was cash actually paid?“

Karl — Wed, 15 Feb 2012 06:23:11 +0000

The word “cash flows” indicates to the key question you should be asking when preparing the statement. “Was cash actually paid?” is the number one question that should always be asked. For an example in a situation where you have bought PPE items during the period and now are going to disclose the outflows on [...]

Checking yourself when preparing the statement of cash flows

Karl — Mon, 13 Feb 2012 06:21:44 +0000

On the statement of cash flows there are certain disclosed amounts which are all connected as they relate to the same area. When preparing the statement, you can easily check yourself by just adding all those connected amounts and compare it with the change on the balance sheet. If it all equals, you can be [...]

Help with Cash Flow differences!

Karl — Wed, 08 Feb 2012 07:52:49 +0000

You are positive that you included everything possible and needed, did the check to make sure all one off deals are disclosed, made sure that actual cash moved in the amounts stated and still end up with a difference. In case the difference is small, the easiest way and less stressful then trying to find [...]

Cash Flow – After first round, did you get everything?

Karl — Mon, 06 Feb 2012 07:49:23 +0000

When preparing statement of cash flows there are things that you always come across – change in inventories, payables and receivables, payment and receiving of loans and fixed assets depreciation, acquisitions etc. These are the first things that are usually entered into the statement and rarely forgotten. You simply have most dealings with those balances [...]

How to make yourself a checklist?

Karl — Wed, 01 Feb 2012 07:10:32 +0000

There are many things you can make a checklist for, but there are a few simple thoughts to keep in mind when preparing one. In essence making a checklist is easy – you list things and can be done with it, but a well thought through checklist requires just a tiny bit more. First things [...]

Benefits of a good checklist

Karl — Mon, 30 Jan 2012 07:08:29 +0000

There are quite a few checklists out there for various things. But why would someone want a checklist when they know what they have to do by heart and everything is so in routine for them anyway? Because what a checklist in essence is, it is a list of things one should do and you [...]

How to reach those “received” amounts on the statement of cash flows?

Karl — Wed, 25 Jan 2012 09:14:22 +0000

Interest received, Repayments of loans granted, Repayments of loans received etc. – how are they reached? Considering that the period for which the statement is prepared is long and the company has various transactions going through its bank account, manually picking interest received may not be an option. But how should you do it then? [...]

How to reach those “paid” amounts on the statement of cash flows?

Karl — Mon, 23 Jan 2012 09:11:58 +0000

On the statement of cash flows there are line items including “paid” within them. Considering that the period for which the statement is prepared for is long and your company does various transactions over the year, picking out for an example all interest payments from the bank account abstract isn’t really efficient. But then how [...]