statement of cash flows and consolidated statements
Post on 12-Jan-2016
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Statement of Cash Flows and
Consolidated Statements
Cash and Cash Equivalents
Classification
Operating
Investing
Financing
Direct vs. Indirect
Direct• report major
classes of receipts/payments
Indirect• reconcile net
income to net cash
Consolidated Financial Statements
Corporation
Affiliate
Consolidation Abuse
• Must consolidate “controlled” subsidiaries
• Definition of “control” has changed from quantitative to qualitative
Elimination
• Parent’s “Investment in Subsidiary” account is replaced with the subsidiary’s assets and liabilities
Development of Accounting PrinciplesGAAP = Generally Accepted Accounting Principles
The Players
Accounting vs. Auditing
The Role of Congress
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