The cash flow statement (ODDS) is a tabular form that contains relevant data about them in the section of articles, as well as information about their receipts in the organization and about payments. This document is one of the four main materials. The other three are: the balance sheet; reports on losses and profits and on changes in equity.
Here we consider all the nuances. ODDS should disclose all the necessary information about the cash flow of the organization, which can characterize the sources of funds, their direction and expenditure. These data are necessary for both owners and creditors. This is an important document. For example, if the owners have the necessary information about the flows of these funds, they can more rationally approach the development of a policy for the use and distribution of profits. And creditors of such data will help to accurately draw up an opinion on the potential of the potential borrower and its ability to generate the said funds, which are necessary for repayment of obligations. This once again confirms the importance of this document. Data on the direction of movement of the enterprise's funds are determined by the corresponding accounts - those that are on hand, special currency and settlement ones - that reflect in increasing order from the beginning of the year and are presented in the currency of the Russian Federation.
Ways of compiling
At this time, the cash flow statement can be made out indirectly and directly. Here everything depends on the individual approach.
- The direct method clearly indicates the directions by which the flows of these funds pass. Is the most applicable method.
- The indirect method implies the indirect receipt of the specified data. Namely, this is done by making adjustments to the profit in relation to the amount of changes in non-monetary items.
Structural features of the statement of cash flows
The document includes three sections:
- Flows of funds from current operations. They should be within the framework of the organization.
- Availability of cash flows from investment-related transactions. In this case, it is implied to conduct intangible assets, issue loans, etc.
- Flows of funds from financial actions. Here, both loan investments and those received from owners are taken into account.
At present, the documentary registration of the movement of fixed assets is carried out according to certain criteria. This is important to know. The given action is carried out according to the order of the Ministry of Finance of the Russian Federation from 02.07.2010 № 66н "About forms of the accounting reporting of the organizations".
Application of ODS
This document is significant in the financial sphere. The cash flow statement is a valuable source of information for conducting analyzes of actual cash flows. This is a significant material. Unlike indicators such as revenue or profits that are highly dependent on accounting rules, ODDS allows investors to more accurately determine where the company is spending its money, and what return can be expected from investing in it. This is an important factor.
Unlike such documents as the "Balance Sheet" and the "Profit and Loss Statement", compilation of ODDS is not carried out in all organizations that maintain accounting records. For example, for subjects of various small businesses it is possible not to make out the specified document if they consider that it does not contain important data for assessing their activities. In addition, ODDS refers to the annual materials of the accounting report, which according to the legislation are prepared only on the basis of annual results. However, some organizations may, at their discretion, compile this document monthly or quarterly.
Statement of Cash Flows - Form 4
Let's consider the detailed description of this document. In ODDS in Form No. 4, information is generated about the movement of enterprise funds in the currency of the Russian Federation and in foreign currency. These data are for the previous and reporting year. This is an important condition. To compile the report, the official currency of the Russian Federation, rubles, is used. However, the unit of their measurement is the same as in the balance sheet (thousands or millions). The code for this form according to OKUD is 0710004. The construction of this document is based on the balance principle: in this plan, receipts are added to the balance that is available at the beginning of the reporting period. Then, the calculated value is subtracted from the flow, resulting in a balance at the end of the reporting period.
Where is it needed?
Determination of receipts and directions of these funds is carried out in such types of activities as investment, current and financial. This fact is set out in paragraph 15 of the "Instructions on the procedure for drawing up and presenting financial statements", which are regulated by Order No. 67n of the Ministry of Finance of the Russian Federation of July 22, 2003. The ODDS specifies data that directly flows from the accounting records of funds. The source is the information specified in the following accounts:
- Foreign exchange.
- Special character. These are accounts that are in banks, with the exception of deposit accounts.
As mentioned above, the data in the ODDS should characterize the changes in the financial, current and investment activities of the organization. This is an important factor. Data on the movement of financial resources of the company under Form N 4 are in the currency of the Russian Federation. This is important to know. In the event that funds are available in foreign currency, information is generated about its movement for each of its varieties as applied to ODDS. This is a prerequisite for the preparation of this document. After that, the data of all calculations compiled in foreign currency are recalculated in accordance with the rate that was indicated in the Central Bank of the Russian Federation at the time of the accounting report. This action is mandatory. Then, the obtained data are summarized for individual calculations when certain indicators are specified, which are indicated in the ODS.
Having familiarized with the above, it is possible to say exactly what the document is. Namely: the cash flow statement has information about where the money was deposited into the organization for a certain period, and what exactly they spent on. This document, together with other financial statements, allows you to provide information through which the indicators of monetary turnover are estimated. Data in the ODDS also helps to determine the changes that have occurred in the organization's assets, the financial structure (solvency and liquidity), the ability to regulate the time and density of funds flows under existing conditions of internal and external factors that can be constantly changing. The availability of this document in the financial statements allows you to fully implement the design of the present value of the planned cash flows for the comparative evaluation of organizations. This is an important argument. At the same time, there are no restrictions for the corresponding analysis of these flows, which are related to the dependence on the parameters of any other reporting and on the chosen accounting policy of the company.