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GAAP vs. IFRS: Statement of Cash Flows definitions Flashcards

GAAP vs. IFRS: Statement of Cash Flows definitions
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  • GAAP
    U.S. accounting standards established by FASB, governing financial reporting and presentation, including the cash flow statement.
  • IFRS
    International accounting standards set by IASB, providing global guidelines for financial statements, including cash flow reporting.
  • FASB
    U.S. organization responsible for developing and updating generally accepted accounting principles.
  • IASB
    International body that creates and maintains the International Financial Reporting Standards.
  • Statement of Cash Flows
    Financial report dividing cash movements into operating, investing, and financing activities for a specific period.
  • Operating Activities
    Section of the cash flow statement reflecting cash generated or used by core business operations.
  • Investing Activities
    Cash flow statement section showing cash used for or received from buying and selling long-term assets.
  • Financing Activities
    Part of the cash flow statement detailing cash flows from transactions with owners and creditors.
  • Direct Method
    Approach to presenting operating cash flows by listing specific cash receipts and payments.
  • Indirect Method
    Operating section format starting with net income and adjusting for non-cash items and changes in working capital.
  • Cash Equivalents
    Highly liquid investments readily convertible to cash within 90 days, considered nearly as liquid as cash.
  • Non-cash Investing and Financing Activities
    Significant transactions, such as exchanging stock for assets, that do not involve actual cash movement.
  • Notes to the Financial Statements
    Supplementary disclosures providing details and explanations for items in the main financial statements.
  • Dividends Paid
    Distributions to shareholders, classified as financing activities under GAAP and with flexible classification under IFRS.
  • Interest Paid
    Outflows related to borrowing costs, typically classified as operating activities under GAAP, with options under IFRS.