From the beginning of the Financial Accounting Standards Board’s cash flow project 20 years ago, users expressed a strong preference for the direct method so that they could analyze the gross amounts ...

Under any accounting system there are timing factors and nuances of IRS rules that guide and direct – or confuse and obscure - when revenue is recognized and when taxes must be paid.

Direct method: This method draws data from the income statement using cash receipts and cash disbursements from operating activities. The net of the two values is the operating cash flow.

The direct method is preferred by the International Accounting Standards Board and GAAP due to its greater detail. However, it is the least used method, as it places a greater burden on businesses.

This case is especially important for advisers of passthrough entities, in which the individual owners report flowthrough income. Practitioners and advisers need to be aware of how direct changes of ...

Steven F. Orpurt, Yoonseok Zang, Do Direct Cash Flow Disclosures Help Predict Future Operating Cash Flows and Earnings?, The Accounting Review, Vol. 84, No. 3 (MAY 2009), pp. 893-935 ...

If FASB follows through with its plan to mandate a direct-method cash flow statement for not-for-profit entities, experts say financial statement preparers would be wise to address implementation ...