Statement of cash flows
A statement of cash flows reports changes in cash and cash equivalents during a period, classified into operating, investing and financing activities. It explains how opening cash and cash equivalents become the closing balance. If opening cash is 100 and net operating, investing and financing flows total 40, closing cash is 140, subject to any other required reconciliation items.
Worked example
A business reports cash from customers, equipment purchases and loan proceeds in their relevant categories.
Common mistake
Equating profit with cash generated or including a non-cash transaction as a cash flow.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | K1 | Direct | July 2027–August 2028 |
| ACCA | SBR | Direct | Official assessment-window verification pending |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| CIMA | F1 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: cash flow statement