CPAfanyi.com (CPA Translation Services Network) has been engaged in translation of various financial statements for more than 15 years and has independently developed the translation templates of financial statements in Chinese, English and Japanese versions, thus ensuring our translation works to comply with the requirements of IFRS Taxonomy.
A cash flow statement is a statement that reflects the information about the inflows and outflows of cash and cash equivalents of an enterprise during a certain accounting period. Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Cash inflows and cash outflows of an enterprise during a certain accounting period are caused by various factors. The cash flow statement must first classify reasonably the cash arising from various operating activities of the enterprise and the cash flows used. Cash flows are classified into the following three categories according to the reasons from which they are generated and the purposes of payments: cash flows from operating activities, cash flows from investment activities, and cash flows from financing activities.
(a)Cash flows from operating activities refer to the cash inflows and outflows arising from all transactions and events of the enterprise other than those related to investing activities or financing activities, such as cash receipts from the sale of goods and the rendering of services, and operating leases, etc.; cash payments for goods purchased, services received, advertising and promotions, and payments of all types of taxes, etc.
(b)Cash flows from investing activities refer to the cash inflows and outflows arising from those activities of the enterprise involving the acquisition and construction of long-term assets, investments in items other than those included in cash equivalents, and the disposal of such assets or items, such as cash receipts from returns of investments, cash receipts from returns on investments, cash receipts from disposals of long-term assets, etc.; cash payments to acquire and construct fixed assets, construction in progress, intangible assets, and other long-term assets, cash payments to acquire investments, etc.
(c)Cash flows from financing activities refer to the cash inflows and outflows arising from the enterprise’s acceptance of investments and borrowings of funds, such as cash receipts from investors in making investment in the enterprise, cash receipts from borrowings, receipts of issue of shares, etc.; cash repayments of amounts borrowed, cash repayments of bonds, cash payments for interest expenses, and cash payments for distribution of dividends, etc.