Accounting Review Academy

Statement of Cash Flows

This course provides a comprehensive study of the preparation and presentation of statements of cash flows in accordance with U.S. GAAP under ASC 230. It covers the purpose, format, and classification principles of the statement of cash flows, including the preparation of operating activities using both the direct and indirect methods. Students will learn how to classify cash receipts and payments as operating, investing, or financing activities based on the nature of the underlying cash flows, reconcile net income to net cash provided by operating activities under the indirect method, and understand the presentation and disclosure requirements for significant noncash investing and financing activities. The course also examines the accounting procedures for foreign currency cash flows, including determining the functional currency of foreign operations, translating individual statements of cash flows into the reporting currency, and consolidating them into a single statement. It further explains how exchange rate fluctuations affect cash, cash equivalents, and restricted cash, emphasizing the appropriate translation methods, reporting requirements, and reconciliation of beginning and ending cash balances. Through practical examples and accounting applications, students will develop the knowledge and skills needed to prepare, analyze, and present statements of cash flows in compliance with U.S. GAAP.