METHODOLOGICAL ASPECTS OF FORMING THE STRUCTURE OF A STATEMENT OF CASH FLOW

Abstract

The article presents recommendations for disclosure of information in the statement of cash flows, compiled by the direct method. The general structure of the report is proposed to be supplemented with indicators: cash flows for business or cash flows before settlement with capital owners; cash flows attributable to equity holders. The addition will increase the relevance of the report for stakeholders evaluating a business, as they will be able to use these indicators to evaluate a business using an income or comparative method without additional calculations. Operating receipts and payments are proposed to be divided into cash received / paid as: prepayment at the end of the period; payment for sold/purchased goods and services in the period; debt repayment. An analysis of such detail will allow timely identification of signs of a financial pyramid of a business based on a constant increase in client prepayments, which are used to pay off accounts payable, loans, and pay current expenses. In order for stakeholders to understand the direction and volume of business investments, investment cash flows are proposed to be presented in terms of investments in real and financial assets, detailing the latter into: investments in group companies, financing of separate divisions, lending to business owners; trading operations in the financial market. In financial flows, settlements with owners of debt and equity capital should be divided into different sections. The proposed changes in the presentation of cash flows will improve the analytics of the cash flow statement, as they will reduce the time for stakeholders to obtain relevant information.