What is the depreciation on the cash flow statement

The cash flow statement

Basics

The cash flow statement should show the source of funds and the use of funds for the liquid funds. It is a cash flow statement that depicts a cash flow and not a cash flow.

The cash flow statement shows the cash flows for the accounting period without gaps. It is therefore a financial statement that shows all liquid cash inflows and outflows for a period.

This gives the following overview:

Annual accountsSizes considered
Balance sheetAssets (assets; use of funds or investment) and capital (liabilities; source of funds or financing)
Income statement (movement calculation)Expenses (operationally induced equity reductions) and income (operationally induced equity increases)
Cash flow statement (movement calculation)Payments (outflow of liquid funds per period) and payments (inflow of liquid funds per period)

 
Here you will find an overview of the basic terms of financial accounting and cost accounting (payment, payment, expenditure, income, expenditure, income, costs and performance).

The cash flow statement is intended to make the cash flows for the reporting period transparent. It thus provides important information regarding the financial situation, in particular the liquid funds and changes in the capital and asset structure of a company. The cash flow statement is a movement calculation that shows the changes in cash and cash equivalents due to incoming and outgoing payments over time.

If the cash flow statement is limited to the movements of the individual balance sheet items, one speaks of an inventory difference balance. This becomes a movement balance through changes.

Legal basis

Section 297 (1) of the German Commercial Code:

The consolidated financial statements consist of the consolidated balance sheet, the consolidated income statement, the notes to the consolidated financial statements, the cash flow statement and the statement of changes in equity. It can be expanded to include segment reporting.

The cash flow statement is thus part of the consolidated financial statements.

Section 264 (1) sentence 2 HGB:

The legal representatives of a capital market-oriented corporation that is not obliged to prepare consolidated financial statements have to add a cash flow statement and a statement of equity to the annual financial statements, which form a unit with the balance sheet, income statement and notes; you can add segment reporting to the annual financial statements.

Cash flow statement

The German Accounting Standard No. 21 (DRS 21) deals with the cash flow statement. The following is specified for the presentation and determination of the cash flow statement:

The starting point for the cash flow statement is the financial resources at the beginning of the period. In the cash flow statement, the cash flows are to be presented separately according to ongoing business activity, investment activity and financing activity. The sum of the cash flows from these three areas of activity corresponds to the change in financial resources in the reporting period, unless these are due to changes in exchange rates, the scope of consolidation or other valuation-related changes.

This divides the cash flow statement into three cash flows:

  • Cash flow from operating activities (also operating cash flow)
  • Cash flow from investing activities
  • Cash flow from financing activities

The following definition of cash flows can also be found there:

Balance of incoming and outgoing payments (net cash flow) for a period from operating, investing and financing activities.

The cash flow is thus a surplus of the operating payments over the operating payments.

There are the following specifications for the presentation of the cash flow:

The presentation of the cash flow from operating activities can be direct or indirect. The cash flows from investing and financing activities are always shown directly.

According to the indirect method, the period result is corrected by non-cash expenses and income and by changes in the inventory of items of the net current assets (excluding cash funds) as well as by all items that are cash flows from investing or financing activities.

Cash generated from operations

Applying the direct method:

1. Deposits from customers for the sale of products, goods and services
2.-Payments to suppliers and employees
3.+Other payments that cannot be allocated to investing or financing activities
4.-Other payments that cannot be allocated to investing or financing activities
5.+Payments from extraordinary items
6.-Payouts from extraordinary items
7.-/+Income tax payments
8.=Cash flow from operating activities

Using the indirect method:

1. Profit or loss for the period (consolidated profit / loss for the year including minority interests)
2.+/-Depreciation / write-ups on fixed assets
3.+/-Increase / decrease in provisions
4.+/-Other non-cash expenses / income
5.-/+Increase / decrease in inventories, trade receivables and other assets that cannot be allocated to investing or financing activities
6.+/-Increase / decrease in trade payables and other liabilities that cannot be allocated to investing or financing activities
7.-/+Gain / loss from the disposal of fixed assets
8.+/-Interest expenses / interest income
9.-Other investment income
10.+/-Expenses / income from extraordinary items
11.+/-Income tax expense / income
12.+Payments from extraordinary items
13.-Payouts from extraordinary items
14.-/+Income tax payments
15.=Cash flow from operating activities

Cash flow from investing activities

The representation is always based on the direct method.

1. Payments received from the disposal of intangible assets
2.-Payments for investments in intangible assets
3.+Payments received from the disposal of items of property, plant and equipment
4.-Payments for investments in property, plant and equipment
5.+Inpayments from the disposal of financial assets
6.-Payments for investments in financial assets
7.+Incoming payments from disposals from the scope of consolidation
8.-Payments for additions to the scope of consolidation
9.+Payments due to financial investments in the context of short-term financial management
10.-Payments due to financial investments in the context of short-term financial management
11.+Payments from extraordinary items
12.-Payouts from extraordinary items
13.+Interest received
14.+Dividends received
15.=Cash flow from investing activities

 

Cash flow from financing activities

The representation is always based on the direct method.

1. Payments from equity injections from shareholders of the parent company
2.+Payments from equity injections from other shareholders
3.-Payments from equity capital reductions to shareholders in the parent company
4.-Payments from equity capital reductions to other shareholders
5.+Inpayments from issuing bonds and taking out (financial) loans
6.-Payouts from the repayment of bonds and (financial) loans
7.+Payments from grants / grants received
8.+Payments from extraordinary items
9.-Payouts from extraordinary items
10.-Interest Paid
11.-Dividends paid to shareholders in the parent company
12.-Dividends paid to other shareholders
13.=Cash flow from financing activities

Calculation of financial resources

1. Cash changes in financial resources (sum of cash flows from the individual areas of activity)
2.+/-Changes in cash and cash equivalents due to exchange rates and valuation
3.+/-Changes in financial resources due to the scope of consolidation
4.+Cash funds at the beginning of the period
5.=Cash funds at the end of the period
Cash flow statement
ShouldTo have
Payouts
from ongoing business activities
 
Payments from ongoing business activities
Cash generated from operations
Payouts
from investing activities
 
Payments received from investing activities
Cash flow from investing activities
Payouts
from financing activities
 
Payments from financing activities
Cash flow from financing activities

© 2009-2020 A.Liebig - Imprint - Contact - Data protection - Table of contents (Sitemap) - Bookkeeping dictionary - Manage cookie settings