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- Publisher
- Emerald Publishing
- Copyright
- Copyright © 2003 MCB UP Ltd. All rights reserved.
- ISSN
- 1022-2529
- DOI
- 10.1108/10222529200300012
- Publisher site
- See Article on Publisher Site
Abstract
In this article, modifications are suggested for the current format of the cash flow statement, which is prescribed by AC 118, in order to address ambiguities and improve comparability. This redefinition of activities, together with the alteration of the layout, leads to a better explanation of the cash‐generating function of an enterprise. The authors argue that the separation of the cash flow for the maintenance of the existing resource base and the cash flow for the expansion thereof, is essential information in a model for the prediction of the future cash flow generation of a company. The resultant increase in the accessibility, reliability and utility of cash flow reporting should enhance users’ economic decision making and liberalise financial information. The modifications proposed in the article can therefore assist standard setters to improve financial reporting.
Journal
Meditari Accountancy Research – Emerald Publishing
Published: Apr 1, 2003
Keywords: AC 11; 8 IAS 7; Cash flow statement; Operating activities; Investing activities; Cash generated internally; Discretionary utilisation of cash