1. A Written Report of 2000 words (+/- 10%) in response to the following task: “Outline the development, purpose, thrust and application of AASB107 Statement of Cash Flows” Your report should be...

Cash Flows
Cash Flows
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Contents
Introduction    3
Discussion    3
“Outline the development, purpose, thrust and application of AASB107 Statement of Cash Flows”    3
Application    4
AASB 107 encourages different disclosure for cash flow. They include;    7
Conclusion    8
References    11
Introduction
When using direct technique to create cash flows from the operating activities, the entity displays the main revenue categories as total cash inflows from operating activities and the major spending categories as cash outflows from the working activities need to do it (AASB, 2018). The net CF from working activities is then calculated as the difference between cash inflows and outflows from operating activities. To examine the net cash flow from direct operating activities, the items that determine profits (i.e. income and expenses) on an accrual basis must be converted to cash basis. For example, account-based sales and other revenues are adjusted to provide cash revenues from customers. Adjust accrual basis costs (cost of sales, wages, other costs, etc.) to reflect cash outflows from different types of operating activities. In contrast, the indirect method does not show the inflows and outflows of operating cash flows in the major categories. When using indirect technique to examine net cash flows from working activities, accrued base income is adjusted to cash basis income although entities are permitted to use direct or indirect methods to prepare cash flows from operating activities, IAS 107 provides other information not found in other financial statements (AASB 107 - Cash Flow Statements - July 2004, 2020). It has been recommended that by using the direct method to provide an estimate of future cash flows. Cash flow from operating activities. The indirect technique does not provide information about cash inflows or outflows from various items of operating activities.
Discussion
Outline the development, purpose, thrust and application of AASB107 Statement of Cash Flows
The revised AASB107 co
esponds to the IAS 7 cash flow statement issued or revised by IASB. Paragraphs added to these standards (not mentioned in the body of the equal IASB standard) are recognized by the prefix "Aus" followed by number and decimal number of the associated IASB paragraphs (Dichev, 2017). Paragraphs that can apply only to nonprofits begin by determining their restricted applicability.
Application
This Standard applies to:
1. Each entity that is needed to prepare economic reports in accordance with Part 2M.3 of the Corporations Act;
2. General role financial statements of every reporting entity
3. Financial reports that are, and are held out to be, common function financial reports.
This standard applies to yearly reporting periods starting on or and January 1, 2005. An entity shall a
ange a CFS in accordance with the needs of this standard or report it as an essential element of its monetary reporting for each time. The report is displayed. Users of an entity's financial reporting are involved in how an entity makes moreover uses cash or cash equivalents (Kent, 2016). This is true regardless of the nature of the company's activities and whether cash can be also considered a company's product as well as economic institutions. Businesses want cash for same reason, but the main income-generating activities can be different. They need cash to do business, pay off debt, and benefit investors.
The purpose of the CFS is to provide data about past changes in cash or cash equivalents. It aims to provide GPFR users with the ability to assess the capability of companies to make cash moreover the need for companies to use cash (Kent, 2016). According to paragraphs 4-5 of standard AASB107, cash flow statements, when used in combination with other monetary statements, advantage users because they can:
· Evaluate changes in a company's net worth
· Evaluate a company's financial structure. Solvency and Liquidity
· Evaluate a company's capability to adapt to changing opportunities and circumstances
· Evaluate a company's capability to generate future cash or allow it to predict upcoming cash flows
· Others Impact of using several accounting treatments (such as depreciation techniques) for the same...