June 27, 2018


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Plan your cash flow – one of the most important aspects of the organization operating cycle and the creation of full and effective control system. Budget cash flow is the main document financial planning, prepared for the entire forecast period and presents forecast of cash inflows and expenses, which is classified by type of financial-economic activity: Current (operating activities) ensures that the industrial and commercial functions of the enterprise and generates a basic cash flow, investment activities include the receipt and use of funds related to the sale of fixed assets, financial activity associated with the receipt and repayment of short-term loans, accrued interest and dividends. Under the budget, cash flow to understand the budget (Plan), checking account and cash on hand of the enterprise or its structural unit, which reflects all the projected income and withdraw funds as a result of economic activity enterprise. For effective business enterprise in the present and the future need to have a positive cash balance. That is why bdds play dominant role in the system of budgeting.

bdds make as to ensure the continued availability of funds allocated for the fulfillment of the obligations of the enterprise, and for the effective use of the excess of the funds. Consequently, in bdds should be provides for measures against the so-called "cash breaks", ie situations associated with a lack of cash for current benefits (as a measure can be bank loans, issuance of shares or other attraction funds). Temporarily free funds may be made, for example, investment projects, a bank deposit at interest, etc. Many modern companies that make up ifrs, have difficulty in compiling a report on cash flow. These difficulties are related to differences in the rules of preparation of report on Russian and international standards and only the general nature of international standards giving companies a relative freedom to the extent of disclosure and choice of methods and accounting procedures. Statement of cash flows from operating activities can be compiled using direct or indirect method. As part of investing and financing activities may only use the direct method of reporting.

Direct method is more informative in terms of interpretation of this report and its use for financial analysis company. However, to report on the cash flow statement direct method needs a detailed classifier cash flows, because such method is quite time consuming. Using the direct method of the statement of cash flows is the most effective in terms of automation of the financial statements. Indirect method of preparation statement of cash flows is often used in the preparation of consolidated financial statements, and such a presentation format of the report is often required when placing the public reporting on the exchange. However, this method is less clear and based on it is difficult to unwind or any number of the report to the posting of cash flows that is often required for internal controls and budgeting. Many companies are just two statement of cash flows: one – the direct method, the other – indirect. In this case, one report used to check the numbers the other, thus the final article cash flows are identical. This approach enables management of the company and users reporting all information necessary for decision-making, but requires more effort.