... company's use in the appraisal of the performance of an entity. The accounting standard for cash flow reporting is IAS 7. The aim of IAS 7 is to provide users of financial information about the company's ability to generate cash and cash equivalents, as well as giving the cash needs of the company. Cash flow is normally constructed under the following headings of operating, investing and financing activities. They can be constructed using the direct method or indirect method. Direct method: analysis the cash record of the business showing all cash receipt and payments relating to operating activities. This method gives a better picture of a true cash flow according to its advocates. It's normally said that a company would know whether they are experiencing liquidity [problems when this method is used. Therefore it can be said that this method provides more conclusive information about company's cash requirements. Indirect methods: Indirect ...

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