Discussion on some problems of the hottest cash fl

2022-08-21
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Discussion on several issues of cash flow statement (I)

(editor's note: accounting standards for business enterprises issued by the Ministry of Finance in 1998) It is stipulated that the three main financial statements of the enterprise include the statement of changes in financial position, which has been changed to the cash flow statement, which is an important content of the financial audit and benefit audit of the enterprise. This journal specially invites ludemin from the standards group of the accounting department of the Ministry of finance to work with steel structure buildings that are particularly suitable for outdoor protection in the petrochemical industry; The other is to write this paper for the audit of this form for research and reference)

in order to meet the needs of the development of socialist market economy and further integrate with international practices, the Ministry of Finance issued the accounting standards for business enterprises - cash flow statement in April this year. This shows that the formulation of accounting standards in China has taken another solid step forward. Cash flow statement is a very useful statement. In the late 1980s and early 1990s, many developed countries in the world have listed it as a basic financial statement with the same status as balance sheet and income statement. In recent years, with the increasing expansion of the capital market, investors, creditors and other users of accounting information pay more and more attention to the cash flow information of enterprises. The introduction of cash flow statement standards will inevitably play a good role in further standardizing the disclosure of enterprise accounting information, improving the relevance and usefulness of accounting information, promoting China's securities market and even avoiding people from entering the experimental field by mistake. 1. The characteristics of nano materials and the development of the whole market economy

(I) evolution of cash flow statement

cash flow statement is developed from the original statement of changes in financial position. Both the cash flow statement and the statement of changes in financial position are statements that reveal capital flows. Historically, the capital flow statement is far later than the balance sheet and income statement. The early capital flow statement was mainly used to record the changes of bank deposits, cash and stamps. By the beginning of this century, the capital flow statement has developed into four different formats, which are used to reveal cash, current assets, working capital and the capital flow of all financial activities in a certain period. In the following period, the fund flow reflecting the working capital flow statement became the main format, that is, increasing the items of working capital as the source of funds and reducing the items of working capital as the use of funds

the American Accounting Principles Board (APB) issued its opinion No. 3 in 1963, suggesting that enterprises should prepare a capital flow statement while preparing balance sheets and income statements, and explaining the relevant contents that should be presented in the capital flow statement. However, the explanation is vague, and the enterprise still has great independence when compiling. The fund table of this period is generally called "fund source and application table". In 1971, APB issued opinion No. 19, which clearly requires enterprises to prepare statements that can generally reflect the changes in financial position during the preparation of the income statement. APB calls it the "statement of changes in financial position". At this time, in practice, there are two basic formats for preparing the capital flow statement: working capital format and cash and cash equivalents format. In contrast, the working capital format is still dominant. Due to the lack of corresponding guidelines on reporting methods and their changes, enterprises have many differences in preparing tables, even among enterprises using the same format

In 1973, the American Institute of Certified Public Accountants (AICPA) published a report of the research group on the purpose of financial statements, which believed that one of the purposes of financial statements was to provide investors and lenders with useful information in order to predict, compare and evaluate the amount, time and related uncertainties of expected future cash flows. This is a sign that the professional community has begun to pay attention to cash flow. In 1978, the American Financial Accounting Standards Board (FASB) issued the first series of "announcement on financial accounting concepts - the purpose of enterprises preparing financial reports", which shows the basically same view as AICPA. It believes that people engaged in investment, loans and similar activities are mainly to seek to increase their cash resources. The success or failure of these activities ultimately depends on the extent to which the cash recovered at the beginning of this century is greater (or less) than the cash invested. In December, 1980, the FASB issued a discussion memorandum on "reporting capital flow, liquidity and financial flexibility", suggesting the use of cash based capital flow statements. The memorandum points out that cash income is the main compensation obtained by investors and lenders. If the working capital basis is used in the preparation of the capital flow statement, it is difficult to see the cash flow of a company. Some items in the working capital account that have a significant impact on cash flow, such as accounts receivable and inventory, are easy to be ignored. In 1984, FASB published the 5th series of "financial accounting concept announcement - recognition and measurement of enterprise financial statements", which once again emphasized the importance of cash flow. It is mentioned that the cash flow statement directly or indirectly reflects the cash income of an entity classified by main sources and cash expenditure classified by main purposes during the reporting period. It provides information about the various activities that a certain entity obtains cash from operations to pay debts, distribute dividends, or reinvest to maintain or expand its operating capacity; It also describes various financial activities in debt and equity, as well as cash investment and cash consumption

after a lapse of seven years, FASB issued announcement No. 95 cash flow statement in 1987, officially replacing APB opinion No. 19. Announcement No. 95 came into effect in 1988, requiring enterprises to prepare cash flow statements instead of the original statement of changes in financial position

except for the United States, the International Accounting Standards Board issued IAS 7 cash flow statement in 1989, replacing IAS 77 statement of changes in financial position published in 1977. In 1992, the international accounting standards board revised International Accounting Standards No. 7, which came into effect on January 1st, 1994. The UK also issued financial reporting standard No. 1 - cash flow statement in 1991 and revised it in 1996. In December, 1991, the Australian Accounting Standards Board issued standard 1026 "cash flow statement"

(II) purpose and function of cash flow statement

the purpose of preparing cash flow statement is to provide accounting statement users with information about the inflow and outflow of cash and cash equivalents in a certain accounting period, so that statement users can understand and evaluate the ability of enterprises to obtain cash and cash equivalents, and predict the future cash flow of enterprises

for users of accounting information, the cash flow statement has obvious advantages and more important work than the statement of changes in financial position

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