Search results
Results from the WOW.Com Content Network
In financial accounting, a cash flow statement, also known as statement of cash flows, [1] is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities. Essentially, the cash flow statement is concerned with ...
A statement of changes in equity is one of the four basic financial statements. It is also known as the statement of changes in owner's equity for a sole trader, statement of changes in partners' equity for a partnership, statement of changes in shareholders' equity for a company, and statement of changes in taxpayers' equity [1] for a government.
The difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital of the company and according to the accounting equation, net worth must equal assets minus liabilities. [4] Another way to look at the balance sheet equation is that total assets equals liabilities plus owner's equity.
An asset should also be impaired in accordance with IAS 36 Impairment of Assets if its recoverable amount falls below its carrying amount. [1] Recoverable amount is the higher of an asset's fair value less costs to sell and its value in use (estimate of future cash flows the entity expects to derive from the asset).
Depreciation*(tax rate) which locates at the end of the formula is called depreciation shield through which we can see that there is a negative relation between depreciation and cash flow. Changing in net working capital: it is the cost or revenue related to the company's short-term asset like inventory.
A cash flow statement reports on a company's cash flow activities, particularly its operating, investing and financing activities over a stated period. Notably, a balance sheet represents a snapshot in time, whereas the income statement, the statement of changes in equity, and the cash flow statement each represent activities over an accounting ...
Amortization is the acquisition cost minus the residual value of an asset, calculated in a systematic manner over an asset's useful economic life. Depreciation is a corresponding concept for tangible assets. Methodologies for allocating amortization to each accounting period are generally the same as those for depreciation.
Assets Liabilities Equity Explanation 1 + 6,000 + 6,000 Issuing capital stock for cash or other assets 2 + 10,000 + 10,000 Buying assets by borrowing money (taking a loan from a bank or simply buying on credit) 3 − 900 − 900 Selling assets for cash to pay off liabilities: both assets and liabilities are reduced 4 + 1,000 + 400 + 600