Statements of Cash Flow

When determining the financial sustainability of a company, users of financial statements consider many sources of financial information. A statement of cash flows is one report that can be used to provide information about a company's cash receipts and payments. Reporting of cash flows can be done using an indirect or direct method. Each method has its own characteristics and represents the company's income, assets, and payments differently. This assignment will provide you the opportunity to explore each method of reporting cash flows and the characteristics associated with each. In doing this, you will also explore why a company would prefer one method over another and what impact, if any, it has on stakeholders.

Research the development of the statement of cash flows using your text, the FASB website, and any additional resources you find (such as the IASB site). Write a 2- to 4-page paper evaluating the usefulness of the statement of cash flows, and the strengths and weaknesses of the direct and indirect method of reporting of cash flow statements. Include references to assenting and dissenting opinionsexpressed both during the public hearing exposure drafts and in the final vote by the FASBon cash flow statements.