Describe the Statement of Cash Flows and Its Purpose Including

question 108

Essay

Describe the statement of cash flows and its purpose including what a financial statement user can determine or assess by reviewing a well-prepared statement of cash flows.

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Definitions:

Cash-Generating Units

The smallest identifiable group of assets that generates cash inflows independently of other assets or groups of assets.

Business Combination

A transaction or event in which a buyer obtains control of one or more businesses.

Goodwill

An intangible asset reflecting the premium paid over the fair market value of assets during an acquisition, attributed to the company's brand, customer relations, and reputation.

IFRS

International Financial Reporting Standards, which are a set of accounting principles that govern financial reporting and are designed to be globally consistent.