Page 329 - SBR Integrated Workbook STUDENT S18-J19

Group statement of cash flows

Statements of cash flow

1.1 Purpose

Statements of cash flow reconcile cash and cash equivalents between the start and
the end of the reporting period.

A statement of cash flows is important because it enables users of the financial
statements to assess an entity’s liquidity, solvency and financial adaptability.

1.2 Classification of cash flows

The statement of cash flows presents an entity’s cash flows under three headings:

 cash flows from operating activities

 cash flows from investing activities

 cash flows from financing activities.

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