Do you think the FASB should continue to require the Statement of Cash Flows or are...

Do you think the FASB should continue to require the Statement of Cash Flows or are the balance sheet and income statement sufficient?

Please answer this discussion question. Write a few paragraphs.

Expert Solution

The FASB requires the cash flow statement to be part of a full set of the financial statement for all businesses. It required cash flow statement to show classify Cash receipts and cash payments in operating, financial and investing activities.

Thus the cash flows statement gives a clear picture of how much cash the company has received and paid during the accounting period. Cash Flow from operations shows how much cash the company is actually generating because of its operations.

Since these are cash items, there is no chance of tempering it however it is possible to inflate the net income of an organization by adjusting the non-cash items.

Also, cash is universally accepted, therefore there is no chance of a difference in value given in statement and the actual value which may occur in case of other tangible and intangible assets.

Hence cash flows statement provides reliable and important information to investors.

Therefore the cash flow statement should continue to be required by the FASB.

ekkarill92 answered 1 month ago

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