statement of cash flows
Note: Indicate the question before the answer.
- Evaluate two (2) major differences between GAAP and IFRS with respect to the statement of cash flows. Give your opinion on which method you prefer. Provide a rationale for your response.
- Imagine you are the senior accountant at your organization and management is unsure of the difference between the indirect method and the direct method of preparing a statement of cash flows. Outline a brief memo to management differentiating between the direct method and indirect method. Advise management on which method the company should use to prepare the statement of cash flows. Provide at least two (2) specific examples on why the method you selected would be beneficial to the company
Answer PreviewThere are major distinctions involved in using cash flows with the guidance of the GAAP and the IFRS. While using the GAAP, elements of a transaction are categorized inclusively on the foundation of the foremost origin of the cash flows (Camfferman and Zeff, 2015). However, according to IFRS, different elements of a solitary transaction are categorized as investing,…
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