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Sir
Regarding statement of cashflows
One definition says
?It’s the reconciliation between
Cash and cash equivalents?Another statement says
It’s the reconciliation between the profit before tax figure in the income statement and the cash figure in the balance sheet .Sir Could you please tell
What’s the link/ correlation between the above two statementsThank you ?
Hi,
The SCF does look at how the opening and closing cash has moved over the year but if we’re also using the indirect method then the SCF starts with the PBT figure at the top and so we’ll be adjusting this to reconcile back to the closing cash figure. So they both hold true and try not to worry about the definitions as that won’t be seen in the exam.
Thanks
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