When determining the financial sustainability of a company, users of financial statements consider many sources of financial information. A statement of
cash flows is one report that can be used to provide information about a company’s cash receipts and payments. Reporting of cash flows can be done using
an indirect or direct method. Each method has its own characteristics and represents the company’s income, assets, and payments differently. This
assignment will provide you the opportunity to explore each method of reporting cash flows and the characteristics associated with each. In doing this, you
will also explore why a company would prefer one method over another and what impact, if any, it has on stakeholders.
Research the development of the statement of cash flows using your text, the FASB website, and any additional resources you find (such as the IASB site).
Write a 2- to 4-page paper evaluating the usefulness of the statement of cash flows, and the strengths and weaknesses of the direct and indirect method of
reporting of cash flow statements. Include references to assenting and dissenting opinions—expressed both during the public hearing exposure drafts and in
the final vote by the FASB—on cash flow statements.
Be sure to support your work with specific citations from this week’s Learning Resources and any additional resources
