basic concept
1. Cash
Cash refers to the cash in stock and deposits that can be used for payment at any time.
Accounting cash usually refers to the cash on hand of an enterprise. The "cash" in the cash flow statement includes not only the cash on hand, but also the deposits deposited in financial enterprises and ready to be paid, as well as other monetary funds such as foreign currency deposits, bank draft deposits, cashier's check deposits and monetary funds in transit. It should be noted that some deposits in bank deposits and other monetary funds that cannot be used for payment at any time, such as time deposits that cannot be withdrawn at any time, should not be regarded as cash, but should be listed as investment; Time deposits that can be withdrawn in advance by financial enterprises should be included in the cash range.
2. Cash equivalents
Cash equivalent refers to the investment held by an enterprise with short term, strong liquidity, easy conversion into known amount of cash and little risk of value change. Although cash equivalent is not cash, its ability to pay is not much different from cash, so it can be regarded as cash. If an enterprise holds the necessary cash in order to ensure its ability to pay, and in order not to let the cash idle, it can buy short-term bonds, which can be realized at any time when it needs cash.
To be recognized as a cash equivalent, an investment must meet four conditions at the same time: short term, strong liquidity, easy to convert into a known amount of cash, and low risk of value change. Among them, the term is short, which generally means it expires within three months from the date of purchase. For example, short-term bond investment that can circulate in the securities market and expire within three months.
3. Capital flow
Cash flow is the amount of cash inflow and outflow in a certain period of time. For example, enterprises obtain cash by selling goods, providing services, selling fixed assets and borrowing from banks. , forming the cash inflow of enterprises; The cash outflow of an enterprise is formed by purchasing raw materials, accepting labor services, purchasing and building fixed assets, investing abroad and repaying debts. Cash flow information can indicate whether the enterprise is in good operating condition, whether it is short of funds and its solvency, thus providing very useful information for investors, creditors and enterprise managers. It should be noted that the conversion of corporate cash forms will not produce cash inflows and outflows. For example, the withdrawal of cash from the bank by an enterprise is a conversion of the cash storage form of the enterprise, but it does not flow out of the enterprise and does not constitute cash flow; Similarly, the conversion between cash and cash equivalents does not belong to cash flow, for example, enterprises use cash to buy government bonds due within 3 months.
Accrual basis and cash basis
1. Accrual basis and cash basis
2. Exchange of accrual basis and cash basis
Accrual basis adjustment cash basis
Sales revenue+accounts receivable at the beginning-accounts receivable at the end = sales cash revenue.
Cost of sales+ending inventory-opening inventory+opening accounts payable-ending accounts payable = cash paid for purchases.
Operating expenses+deferred expenses at the end of the period-deferred expenses at the beginning.
+Opening payables and accrued expenses-closing payables and accrued expenses = cash amount of operating expenses.
basic requirement
1. When an enterprise prepares its annual report at the end of the year, it shall prepare a cash flow statement. After an enterprise prepares a cash flow statement, it will no longer prepare a statement of changes in financial position.
2. The cash flow statement shall indicate the enterprise name, accounting period, monetary unit and report number.
3. The cash flow statement shall be signed and sealed by the watchmaker, the accounting supervisor and the person in charge of the unit.
4. Enterprises should do a good job in setting up basic accounting work such as cash books according to the needs of preparing cash flow statements, and enterprises with conditions should also set up relevant auxiliary books needed for preparing statements.
5. An enterprise shall clearly define the recognition criteria of cash equivalents and disclose them. If the recognition standard of cash equivalents changes, it shall be explained and the influence of the change of recognition standard on cash flow shall be disclosed.
On the criteria of cash flow statement
Chapter II Classification of Cash Flow
(1) Classification of cash flow
The standard divides cash flow into three categories, namely, cash flow generated by operating activities, cash flow generated by investment activities and cash flow generated by financing activities.
1. Business activities
Business activities refer to all transactions and matters of an enterprise except investment activities and fund-raising activities.
According to the above definition, the scope of business activities is very wide, including all transactions and events except investment activities and fund-raising activities. As far as industrial and commercial enterprises are concerned, their business activities mainly include: selling goods, providing services, operating leases, purchasing goods, receiving services, advertising, promoting products, paying taxes and so on.
Due to the different characteristics of various industries, there are certain differences in the identification of business activities. When compiling the cash flow statement, the cash flow should be reasonably classified according to the actual situation of the enterprise. Due to the particularity of financial and insurance enterprises, this standard gives hints on the identification of financial and insurance enterprises' business activities.
2. Investment activities
Investment activities refer to the purchase and construction of long-term assets of enterprises and the investment and disposal activities that are not included in the scope of cash equivalents. The long-term assets referred to here refer to fixed assets, projects under construction, intangible assets, other assets and other assets with a term of more than one year.
The reason why "investments included in the scope of cash equivalents" are lined up here is because investments included in the scope of cash equivalents have been regarded as cash.
Investment activities mainly include: obtaining and recovering investment, purchasing and disposing of fixed assets, intangible assets and other long-term assets.
3. Fund raising activities
Financing activities refer to activities that lead to changes in the scale and composition of enterprise capital and debt.
The capital mentioned here includes paid-in capital (equity) and capital premium (equity premium). Cash inflow and outflow items related to capital, including investment absorption, stock issuance and profit distribution.
The "debt" here refers to the money borrowed by enterprises from abroad, such as issuing bonds, borrowing from financial enterprises and repaying debts.
(2) About the cash flow generated from business activities.
1. Cash received from selling goods and providing services
Cash received from selling goods and providing services refers to cash received from business activities such as selling goods or providing services.
Please note the following points:
1. This business activity includes all business activities except operating lease;
2. This project does not include the VAT output tax received together with sales income and labor income;
3. This project should include the recovery of the previous payment and the current advance payment;
4. Cash returned from sales should be deducted from this item.
Cash received from selling goods or providing services in this period can be calculated by the following formula:
Cash received from selling goods and providing services = cash income received from selling goods or providing services in the current period+accounts receivable received in the previous period+bills receivable received in the previous period+accounts receivable received in advance in the current period-cash returned from sales in the current period+bad debt losses recovered in the previous period.
Step 2 receive rent
This project reflects the operating lease rental income received by the enterprise.
3. VAT received and VAT refunded
The value-added tax output tax obtained by enterprises selling goods and the cash obtained by tax refund for export products according to regulations should be reflected separately. In order to calculate the cash flow of this project, the enterprise should set up two detailed accounts: accounts receivable and notes receivable under payment and value-added tax. Accounts receivable (notes receivable)-Payment for goods is used to adjust and calculate cash received from sales and services.
4. Refund of taxes and fees other than the value-added tax received.
In addition to VAT refund, enterprises also have other tax rebates, such as income tax, consumption tax, customs duties and additional tax rebates for education fees. These returned taxes and fees are reflected in this project according to the money actually received.
5. Cash paid for goods and services.
Cash paid for purchasing goods and accepting services includes cash paid for purchasing goods in the current period, cash payable for purchasing goods in the previous period and cash paid in advance.
The input tax that can be deducted from the output tax of value-added tax paid at the same time for purchasing goods or accepting services is reflected in the "paid value-added tax" item. If the VAT input tax included in the purchase of goods or services cannot be deducted from the VAT output tax, it will still be reflected in this project.
The cash paid by the enterprise for purchasing goods and accepting services in this period can be calculated by the following formula:
Cash paid for goods and services = cash paid for goods and services in the current period+accounts payable in the previous period+notes payable in the previous period+prepayments in the current period-cash returned due to purchases in the current period.
6. Cash paid for operating lease
The rent paid by an enterprise for operating lease is reflected by the actual amount paid in the current period.
7. Cash paid to employees
This project reflects the wages paid by enterprises to employees in cash and other cash paid for employees. The wages paid to employees include wages, bonuses and various subsidies; Other cash paid for employees, such as pension, unemployment and other social insurance funds paid by enterprises for employees, commercial insurance paid by enterprises for employees, etc.
8. Paid VAT
This project reflects the actual value-added tax paid by the enterprise for purchasing goods, which can be deducted from the output tax of value-added tax and the actual value-added tax paid. In order to calculate the cash flow of this project, the enterprise should set up two detailed accounts: payment for goods and value-added tax under accounts payable and notes payable. Accounts payable (notes payable)-Payment for goods is used to adjust and calculate the cash paid for goods and services.
The value-added tax paid by investment activities should be listed in the cash flow of investment activities and not reflected in this project.
9. Paid income tax
This project reflects the actual income tax paid by the enterprise in this period.
10. Other taxes except VAT and income tax.
This project reflects all kinds of taxes actually paid by enterprises in this period, except for value-added tax and income tax, according to relevant state regulations. Including the taxes incurred and actually paid in the current period, the taxes paid in the previous period and the taxes paid in advance.
Tax expenditures incurred by related investment projects should not be listed as cash flows generated by business activities, but should be listed in related investment projects. Pay the investment direction adjustment tax, should be reflected in the "cash paid for the purchase and construction of fixed assets" project.
1 1. Other cash related to business activities.
In addition to the above-mentioned main items, enterprises also have some items, such as cash expenditures such as management expenses, which can be reflected in the item "Other cash paid related to business activities".
(iii) Cash flow from investment activities
1. Cash received from investment recovery
The investment money recovered by the enterprise includes two parts, one is the investment principal, and the other is the investment income. In addition to the investment principal reflected in this project, the investment income recovered together with the investment principal should also be reflected in this project. However, the principal and interest of bond investment are generally easy to distinguish, and its bond interest income should be separated from the principal and reflected separately in the item of "cash received from bond interest income".
2. Cash received from dividends or profits
This item reflects dividends or profits obtained from foreign investment.
3. Cash received from bond interest income
This project reflects the cash interest income obtained from corporate bond investment. Interest income from bond investment included in cash equivalents should also be reflected in this project.
4. Net cash received from the disposal of fixed assets, intangible assets and other long-term assets.
This item reflects the cash obtained from the sale of fixed assets, intangible assets and other long-term assets, after deducting the related expenses paid for the sale of these assets. The project also includes the income from the sale of scrapped and damaged fixed assets and the income from insurance compensation received in case of disasters.
If the net cash recovered from the disposal of fixed assets, intangible assets and other long-term assets is negative, it shall be reflected as cash outflow from investment activities and listed in "other cash paid related to investment activities".
5. Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets
The money paid by an enterprise for the purchase and construction of fixed assets includes cash paid for the purchase of machinery and equipment, value-added tax, cash paid for construction projects, wages paid to engineers under construction and other cash expenditures.
Cash paid for the purchase of intangible assets includes the actual cash expenditure of various intangible assets purchased or created by enterprises.
The purchase and construction of fixed assets does not include the rent paid by renting fixed assets through financial leasing. The rent paid for renting fixed assets through financial leasing shall be reflected in the cash flow of financing activities.
6. Cash paid for equity investment
This project reflects the cash paid by enterprises for equity investments such as stocks.
7. Cash paid for debt investment
This item reflects the bond cash paid by enterprises except cash equivalents. If the bond price purchased by an enterprise contains bond interest, if it is purchased at a premium or discount, it shall be reflected according to the actual amount paid.
8. Other cash receipts and payments related to investment activities
In addition to the above investment activities, enterprises will also have cash income and cash expenditure from other investment activities. These revenues and expenditures are reflected in the items of "other cash received related to investment activities" and "other cash paid related to investment activities" respectively.
(iv) Cash flow from financing activities
1. cash received from absorbing equity investment
This project reflects the cash received by enterprises to raise capital through issuing stocks. Among them, the public offering of shares by a joint stock limited company must be entrusted to a financial enterprise for public offering, and the fees directly paid by the financial enterprise, such as handling fees, publicity fees, consulting fees and printing fees, are deducted from the cash income obtained from the issuance of shares and presented in net amount.
2. Cash received from issuing bonds
This project reflects the cash received by enterprises to raise funds by issuing bonds. This project is presented in cash actually received by issuing bonds. The expenses incurred by entrusting financial enterprises to issue bonds should be treated as the expenses incurred by issuing stocks, that is, the cash obtained from issuing bonds should be listed after deducting the expenses paid by the issuing company.
3. Cash received for loans
This project reflects the cash received from various short-term and long-term loans borrowed by enterprises.
4. Cash paid for debt repayment
This project reflects the cash paid by enterprises to repay debts, including: repayment of loans from financial enterprises, repayment of bonds due by enterprises, etc.
This item is filled in according to the actual debt repayment amount paid by the enterprise in the current period. Debts paid in non-cash should be explained in the notes to the statements.
The interest expenses incurred by borrowing are not reflected in this project, but included in the project of "cash for repayment of interest payment".
5. Cash for financing expenses.
This project reflects various expenses incurred by enterprises for financing activities such as issuing stocks, bonds or borrowing from financial enterprises, such as consulting fees, notarization fees, printing fees, etc. The cash expenditure mentioned here refers to the upfront expenses incurred before the funds reach the enterprise, excluding interest expenses and dividend expenses. The expenses paid by financial enterprises to issue stocks or bonds on behalf of the above-mentioned entrusted financial enterprises shall be deducted from the financing funds and not included in this project.
6. Cash paid for distributing dividends or profits
This item reflects the cash dividends actually paid by the enterprise in the current period and the cash paid for distributing profits.
7. Cash to pay interest
This project reflects the loan interest and bond interest paid by enterprises in cash.
Loans with different purposes and different channels of interest expenditure, such as projects under construction and financial expenses, should be reflected in this project.
8. Cash paid by finance lease
This project reflects the cash paid by renting fixed assets through financial leasing. Including the rent payable in this period and the rent payable in the previous period but not paid in this period.
9. Reduce the cash paid by registered capital
If an enterprise suffers heavy losses due to changes in its operating conditions and cannot make up for or reduce its operating scale in the short term, it may reduce its capital according to law. This project reflects the cash expenditure incurred by shareholders due to the reduction of business scale and the withdrawal of capital.
10. Other cash receipts and payments related to financing activities
In addition to the above financing activities, enterprises will also have some other cash receipts and cash expenditures related to financing activities. These income and expenditure are reflected in the items of "other cash received related to financing activities" and "other cash paid related to financing activities" respectively.
The third chapter is the structure of cash flow statement and related problems in its compilation.
1. Total method and net method
The so-called total cash flow method means that in the preparation of cash flow, cash inflows and cash outflows are listed as total amounts respectively, and income and expenditure are unbalanced.
The net method means that the cash flow is itemized as net after the balance of payments.
The cash flow statement should generally reflect the total amount, thus fully revealing the direction, scale and structure of cash flow. However, cash received or paid on behalf of customers, as well as cash receipts and payments of projects with fast turnover, large amount and short term, should be presented in net terms.
2. Direct method and indirect method
The direct method reflects the cash flow of business activities through the main categories of cash income and expenditure. The indirect method takes the current net profit as the starting point, adjusts the increase and decrease of income, expenses, non-operating income and expenses and related items, and calculates the cash flow of operating activities.
The current accounting standards stipulate the direct method, and at the same time, it is required to disclose the information of adjusting net profit to cash flow from operating activities in the notes to the cash flow statement, that is, the indirect method is used to calculate cash flow from operating activities.
3. Structure of cash flow statement
The cash flow statement is divided into two parts: positive statement and supplementary information.
The positive part of the cash flow statement is based on "cash inflow-cash outflow = net cash flow", and the cash inflow and outflow of enterprises are reported by multi-step method respectively.
The supplementary information part of the cash flow statement is subdivided into three parts. The first part is investment and financing activities that do not involve cash receipts and payments; The second part is to adjust the net profit to the cash flow of operating activities, that is, the so-called net method of compiling cash flow statement; The third part is the net increase of cash and cash equivalents.
The fourth chapter is the compilation method of the text of cash flow statement.
From an intuitive point of view, the cash flow statement can be compiled directly according to the classification of cash flow through the detailed records of cash and its equivalents (such as journals) (in fact, the journals of cash and its equivalents can be regarded as cash flow statements), but when the cash business volume is large, it is not realistic to classify it manually, and it can be compiled by adjusting the income statement and balance sheet items in practice.
The data sources for adjustment and compilation include the opening and closing numbers of balance sheet items, the current number of income statement and detailed records of related accounts, and may need to be traced back to the specific content of original economic business when necessary.
There are two specific methods for compiling cash flow statement, namely, working paper method and T-account method. Here, taking the working paper method as an example, the preparation procedure of cash flow statement is listed:
The first step is to design a working paper, and input the ending opening number of the balance sheet and the current year number of the income statement into the working paper. (Balance sheet, income statement omitted. )
The second step is to make adjustment entries and input them into the working paper.
When compiling adjustment entries, first, based on the income statement items, combined with the balance sheet, and then based on the balance sheet, analyze the adjustments one by one in order.
1. Analysis and adjustment of product sales revenue
Adjust product sales income to cash received from selling goods. The formula is:
Cash received from selling goods = product sales revenue+accounts receivable at the beginning-accounts receivable at the end.
Prepare accounting entries:
Debit: cash flow from operating activities-cash received from selling goods 120 1000.
Accounts receivable-49,000 yuan paid
Loan: product sales revenue 1250000.
Note: (1) The opening and closing balances require a clear distinction between payment for goods and value-added tax.
(2) Discounting of bills receivable should be considered when adjusting financial expenses.
(3) Cash inflow should include other business income, especially rental income.
(4) Recovering the bad debts of the previous period in this period shall be considered when adjusting the bad debt reserve.
(5) Sales return does not affect the correctness of this formula.
Analyze and adjust the cost of product sales
Adjust the cost of product sales to cash paid for goods.
Formula: Buy goods