Direct and Indirect method of Cash Generated?

Distinguish between the direct method and the indirect method of calculating the amount of cash generated from an entity’s operations.

If the direct method is used, major classes of receipts and payments arising from operating activities are disclosed individually and are then aggregated to give the total amount of cash generated from operation.
The indirect method takes the profit or loss for the period (before tax) as its starting point and then makes a number of adjustments to this profit or loss so as to calculate the total amount of cash generated from operations.

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