INVESTING

ACTIVITIES

Zhaksylyk Nazgul
n_zhaksylyk@kbtu.kz
STATEMENT OF CASH FLOWS
A statement of cash flows is to provide
information about the cash receipts and
payments of a business entity during the
accounting period.

In a statement of cash flows, information about

cash receipts and cash payments is classified in
terms of the company's operating activities,
investing activities, and financing activities. A
statement of cash flows helps users of financial
statements evaluate a company's ability to have
sufficient cash both on a short-run and on a long-
run basis.
CLASSIFICATION OF CASH FLOWS

operating activities investing activities financing activities

Cash flows relating to investing

activities present the cash
effects of transactions involving
plant assets, intangible assets,
and investments.
INVESTING include:

ACTIVITIES -Cash Receipts

-Cash proceeds from selling
investments
- plant and intangible assets
-Cash proceeds from collecting
principal amounts on loans
-Cash Payments
-Payments to acquire -
investments and plant and
intangible assets
-Amounts advanced to
borrowers
REPORTING
OPERATING CASH
FLOWS
BY THE INDIRECT
METHOD
The indirect method is a way of calculating cash flow using
transactions to determine payments and expenses, rather
than cash on hand.

The indirect method measures how much a company has

earned or spent from various sources over a certain period.
This helps to assess the current state of the business and
financial stability, as well as whether it has money that can
be spent on growth and other investments.
1. Preparing the 2. Multiple levels of
operating section of adjustments are required
statement of cash to reconcile accrual-
flows by the indirect based net income to cash
method starts with flows from operating
net income from the activities.
income statement
and adjusts for items 3.The investing section of
that affect cash flows the statement of cash
differently than they flows relates to changes
affect net income. in long-term assets.
4. indirect method starts 5. Company activities that
with net income from the reflect changes in long-
income statement and term assets, long-term
adjusts for items that liabilities, or equity, but
affect cash flows have no cash impact,
differently than they require special reporting
affect net income treatment, as noncash
investing and financing
transactions.
 Although the indirect method is easy to
prepare, it lacks transparency. It can be
hard to track down and tally what’s been
paid and what hasn’t, meaning itsdoesn’t
always accurately represent a business’s
cash on hand.
Thank you