The Sage Course Companion on Financial Accounting is an accessible introduction to the subject that will help readers to master key concepts and enhance their thinking skills in line with course requirements. It provides support on how to revise for exams and prepare for and write assessed pieces.

The Cash Flow Statement

The cash flow statement


The cash flow statement is a relative newcomer to financial reporting. In the UK, until 1991, cash flow statements were published on a voluntary basis. Then in 1991 the UK Accounting Standards Board published FRS 1, Cash Flow Statements. Since 2005 quoted companies in the UK and the European Union have been following IAS 7, Cash Flow Statements, published by the International Accounting Standards Board. At one time there was a debate over whether the profit and loss account was superior to the cash flow statement or vice versa, but now it seems to be widely accepted that both statements have a useful (and complementary) role to play in reporting business financial performance.


In order to understand the rationale ...

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