Indirect Versus Direct Method of Preparing the Statement of Cash Flows: Which Method Enhances the Understandability and Relevance of Cash Flows Information to Users?
Author(s):
Anil J N Shukla1
and Lau Chew King2*
The International Accounting Standards Board (IASB) proposed several amendments to International Accounting Standards 7 (IAS 7) in December 2019. One of the proposed amendments is to allow companies to continue with the choice between Direct Method (DM) and Indirect Method (IM) in the presentation of the statement of cash flows (SCF).
