Talking Cents

Small business accountants in Sydney explain the statement of cash flows

A cash flow statement reports a business’s cash flows over a period of time. When creating a statement of cash flows, our small business accounts in Sydney include all cash inflows and outflows from the business’s operating, investing and financing activities. Detailed below are the important characteristics of a cash flow statement.

Our business accountants in Sydney believe that a cash flow statement is important because it:

• provides information about cash inflows and cash outflows during a period

• provides information about cash changes between two balance sheet dates

• discloses items that affect the balance sheet that don’t show up in the income statement

Sometimes there are disclosures for non-cash investing and financing activities that our professionals in business accounting in Sydney have to record. Although some transactions do not involve cash, they are still important to help properly understand a company’s cash flows. Therefore, these non-cash investing records must be disclosed either on the face of the cash flow statement or in the notes to the financial statement.

For more information about what is included in a statement of cash flows, please contact our small business accountants in Sydney today.