27
IAS 7 and PSAK required the
listed entities to use direct
method which
will be
explained further.
2.3 The Classification of Statement of Cash Flow
To what have been stated before, the statement of cash flow report the total cash
inflow and outflow of the company which classified into three categories including
operating, financing and investing activities.
2.3.1 Cash Flow from Operating Activities
Cash
generated
from the
company’s
operation
is
usually
known
as
cash
flow
from operating activities.
The operating cash
flow (OCF) can be calculated by
adding depreciation with EBIT and then minus the taxes (EBIT+depreciation-
taxes)
Inevstopedia(n.d). In
addition,
when
referring
to
IAS
7
paragraph
6
(International
Financial
Reporting
Standard 2005), operating activities is
defined
as
“the
principle
revenue-producing activities of an entity and other
activities that are not investing or financing activities”. Generally the items
in
the operating activities can affect several accounts in the financial statement
which are as follows:
•
The items in the operating activities may generate revenue, expenses, gains
or even loses
 |