what entities are not required to provide a statement of cash flows? Explain why.

Expert Solution

Investment enterprises or a common trust fund held for the collective investment and reinvestment of moneys by a bank , insurance entity are not required to provide statement of cash flows if the following conditions are met:

1. The entity's investments are substantially all highly liquid.

2. The investments of the entities are carried at market value

3. It has relatively low or no debt outstanding during the period under consideration in relation to the average total assets.

4. A statement of changes in net assets is provided by the entity.

A statement of cash flows is required when the entities have both cash and non cash transactions to ascertain the net cash flow during the period under consideration. However, when the entities as listed above have assets that primary consist of cash and cash equivalents as its assets , a specific cash flow is not required when a statement of net assets is prepared.

ekkarill92 answered 1 year ago

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