Loans on cash flow statement

[Eldacan]

Hi,

I was elaborating a cash flow statement through the indirect method and I have some doubts on how to treat short term and long term loans.

Should I consider short term loans in the operational cash flow and account their difference in the balance sheet from one period to the other or should I just take into account principal payments?

How do long term loans work? Should I consider its difference in the balance sheet as financing cash flow or should I just take into account any actual principal payment there has been?

Are interest payments actively reported somewhere or are they implicitly considered in the initial net income figure?


Thank you very much for your help.

 

[Gerald]

Short term and long term loans (as opposed to trade payables) are included in the financing section. Long term loans are loans that extend beyond an operating cycle (typically one year). Cash paid for interest and taxes appear as supplemental disclosures.

 

[Eldacan]

Perfect, thank you for your reply.