Australia Is a statement of cash flows necessary if the company uses cash accounting?


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Would the income statement not technically provide the same information?
 
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kirby

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Nope. One of the main reasons it became a required statement was that sketchy companies would issue an income statement claiming tons of income. Investors bought their stock based on the income statement. But all that income was ACCRUED and little was actually collected in cash, which of course is not going to be good long term for any company. So the cash flow statement became required to expose these cashless situations.
 
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kirby

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After my response, I saw you specified cash only acctg in your heading. That would avoid the accrual income issue, certainly. And would provide the same results. Format would differ though.
 

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