Transcript Chapter 23: Statement of Cash Flows

Intermediate Accounting, 11th ed.
Kieso, Weygandt, and Warfield
Chapter 23: Statement of Cash
Flows
Prepared by
ROVILA EL MAGHVIROH
STIE Perbanas Surabaya
Chapter 23: Statement of Cash
Flows
After studying this chapter, you should
be able to:
1.
2.
3.
4.
Menguraikan tujuan laporan arus kas.
Identifikasi klasifikasi arus kas.
Membedakan laba bersih dg arus kas
bersih dari kegiatan operasi.
Membandingkan metode langsung dan
tidak langsung utk menghitung arus kas
bersih dari kegiatan operasi.
Chapter 23: Statement of Cash
Flows
5.
6.
7.
8.
9.
Menentukan arus kas bersih dari kegiatan
investasi dan pembiayaan.
Menyiapkan Laporan Arus kas.
Mengidentifikasi sumber informasi utk
Laporan arus kas.
Mengidentifikasi masalah khusus dlm
menyiapkan laporan arus kas.
Menjelaskan penggunaan neraca lajur dlm
menyiapkan laporan arus kas.
Manfaat of the Statement of
Cash Flows
Membantu para investor, kreditor, dan pihak
lainnya dlm menilai hal2 sbb:
* Kemampuan entitas utk menghasilkan arus
kas dimasa depan.
* Kemampuan entitas utk membayar dividen
dan memenuhi kewajibannya.
 Penyebab perbedaan antara laba bersih dan
arus kas bersih dari kegiatan operasi.
 Transaksi investasi dan pembiayaan yg
melibatkan kas dan non kas selama suatu
periode.
The Cash Flow Statement
The cash flow statement provides
information about:


the cash receipts (cash inflows), and
uses of cash (cash outflows) during the
period
Inflows and outflows are reported for:



operating activities,
investing activities, and
financing activities during the period
Statement of Cash Flows:
Concept
Operating
activities
Investing
activities
Financing
activities
inflows
Cash
Pool
Operating
activities
Investing
activities
outflows
Financing
activities
Preparing a Statement of Cash Flows
There are two methods of preparing
the statement of cash flows:
the indirect method and
2. the direct method
1.
The indirect method derives cash
flows from accrual basis statements.
The direct method determines cash
flows directly for each source or use of
cash.
Statement of Cash Flows:
Indirect Method: Concept
Earned
Revenues
+
Eliminate
Non-cash revenues
Net Income
Expenses
Incurred
-
Operating
cash flow
Eliminate
Non-cash charges
The Statement of Cash Flows:
Indirect Method
Accrual Basis Statements
Cash Flow Statement
Income Statement
items & Changes in
Current Assets and
Current Liabilities
Operating activities:
Adjust net income for accruals
and non-cash charges to get
cash flows
Balance Sheet: Changes
In Non-Current Assets
Investing activities:
Inflows from sale of assets and
Outflows from purchases of
assets
Balance Sheet: Changes in
Non-Current Liabilities
and Equity
Financing activities:
Inflows and outflows
from loan and equity
transactions
Direct Method: Operating
Activities
Inflows
From sales of goods
or services
 From returns on loans
(interest) and returns
on equity securities
(dividends)

Outflows





To suppliers for
inventory
To employees for
services
To government for taxes
To lenders for interest
To others for expenses
Investing and Financing
Activities
 For
the direct and indirect methods the
sections reporting investing and
financing activities are the same.
 The net inflows or outflows for each
section (under the two methods) are
identical.
 The operating activities are reported
differently.
Format of the Statement of
Cash Flows: Indirect Method
Cash flows from operating activities:
Net Income
Adjustments (to arrive at cash flow from operations)
(List of individual inflows and outflows)
Net cash flow from operating activities
$ XXX
$ XX
$ XXX
Cash flows from investing activities:
(List of individual inflows and outflows)
Net cash flow from investing activities
$ XX
$ XXX
Cash flows from financing activities:
(List of individual inflows and outflows)
Net cash flow from financing activities
$ XX
$ XXX
Major Classes of Cash Receipts
and Payments
Formula to Compute Cash
Receipts from Customers
Formula to Compute Cash Payments for
Operating Expenses
Indirect Method: Special Items
Note the following adjustments to net
income in deriving operating cash flow:

Loss on sale of assets is added to net income
 Gain on sale of assets is deducted from net
income
 Discount on bonds payable (as amortized) is
added to net income
 Premium on bonds payable (as amortized) is
deducted from net income
Format of the Statement of
Cash Flows: Direct Method
Cash flows from operating activities:
Cash receipts (individually): Inflows
Cash payments to suppliers (separately): outflows
Net cash flow from operating activities
$ XXX
($ XXX)
$ XXX
Cash flows from investing activities:
(List of individual inflows and outflows)
Net cash flow from investing activities
$ XX
$ XXX
Cash flows from financing activities:
(List of individual inflows and outflows)
Net cash flow from financing activities
$ XX
$ XXX
Direct Method: Concept
Cash Receipts
Cash Payments
From sale of
goods and
services to
customers
To suppliers
To employees
less
From receipts
of interest and
dividends
For operating exp equals
For interest
For taxes
Cash
flow
from
operations
Cash Flow Statement: Direct
Method
Cash receipts from customers:
= Revenue from credit sales + Decrease in A/Rec balances
- Increase in A/Rec balances
Cash Flow Statement: Direct
Method
Cash payments to suppliers:
= Cost of goods sold + Increase in inventory
- Decrease in inventory
+ Decrease in accounts payable
- Increase in accounts payable
Cash Flow Statement: Direct
Method
Cash payments for operating and other expenses:
= Operating expenses + Increase in prepaid expenses
- Decrease in prepaid expenses
+ Decrease in accrued expenses payable
- Increase in accrued expenses payable
Reporting Significant NonCash Transactions




Transactions not involving cash inflows
or cash outflows are non-cash
transactions.
They are not reported in the body of the
cash flow statement.
If material, they are reported as notes
to the statement or in a supplementary
schedule to the financial statements.
Example: Issue of bonds (payable) for
purchase of land.