The Statement of Cash Flow report shows:
- how your cash position has changed over a period of time
- the amount of cash earned from profit
- where you received additional cash, and
- where your cash was spent.
Once your accounts are classified (as Operating, Investing or Financing), they are displayed in that section of the report.
In accounting terms, the Statement of Cash Flow report uses the 'indirect' or 'add-back' method to calculate the cash flows.
Example Statement of Cash Flow report
|A||This figure is the Net Profit/(Loss) amount from the Profit and Loss (Accrual) report.|
|B||This section details changes in Asset and Liability accounts that are classified as Operating.|
|C||This section details changes in Asset and Liability accounts that are classified as Investing.|
|D||This section details changes in Asset, Liability and Equity accounts that are classified as Financing.|
|E||This section details changes in Asset accounts that are classified as Bank.|
An increase in an Asset account will show as a negative amount, while a decrease in an Asset account will show as a positive amount.
An increase in a Liability or Equity account will show as a positive amount, while a decrease in a Liability or Equity account will show as a negative amount.
- Go to the Reports menu and choose Index to Reports.
- Click the Banking tab.
- Under the Cheques and Deposits heading, select Statement of Cash Flow.
- Go to the Accounts command centre and click Accounts List.
- Click on the zoom arrow beside the account you want to change. The Edit Accounts window is displayed.
- [Optional] In the Account Type field, select the appropriate account type. Note that the Bank account type will not display on the Statement of Cash Flow report.
- Click the Details tab.
- In the Classification for Statement of Cash Flows field, select the required classification.
- Click OK.
The three classifications used in the Statement of Cash Flow report are described below. If you are unsure about which classification to use, consult your accountant or an MYOB Certified Consultant.
|Financing||Balance sheet items that are to do with borrowing money or the repayment on borrowings. For example, Hire Purchase, Leases, and Bank Loans. In some cases, this may also include directors' or shareholders' loans.|
|Investing||Balance sheet items that are used when deciding on how to use cash for the acquisition of fixed assets, plant and equipment, and investments. The sale of these assets or the redemption of investments into cash is also an 'investing' activity.|
|Operating||All other balance sheet items, where it is effectively a timing issue that creates the transaction, for example, accruals and prepayments. Accumulated depreciation is classified as 'operating' so that it offsets the depreciation expense in the profit and loss report.|