I. Confirmation of cash flow

Cash flow refers to the inflow and outflow of cash and cash equivalents expressed in monetary amount. From the perspective of accrual basis, "cash flow rarely involves confirmation, because all cash receipts and payments have been confirmed when they occur." Reporting cash flows does not involve estimation or allocation. At the same time, except for the classification of items in the cash flow statement, it rarely involves judgment. (paragraph 53 of FASB SFAC No.5) However, since the preparation of the cash flow statement is based on the cash basis, under the cash basis, the cash flow will also involve the confirmation time (that is, the confirmation time) and the reflected amount (that is, how to reflect it, whether it is reflected by the total amount or the net amount).

1. Confirmation time and basis of cash flow. The recognition standard of cash flow is cash basis, which recognizes cash flow when cash inflow and outflow have occurred in reality. Cash basis (also known as cash basis) is to confirm the income and expenses of the current period based on whether the money is received or paid, no matter when its business occurs. It reflects the financial situation of enterprises and provides reliable information for enterprises to use funds reasonably. Because the current accounting model is based on accrual basis, in order to avoid the complexity and disorder of accounting procedures, the current practice (especially manual accounting) generally does not need to confirm, measure and record the report elements on the basis of cash basis at the same time. From the specific preparation method, according to the direct method, the cash flow information of the three types of activities in the positive table should be adjusted and processed according to the daily records and report data based on accrual basis; According to the indirect method, the cash flow information generated by supplementary information is based on the net profit under accrual basis, and is obtained by adjusting the items that affect non-operating profit and loss in business activities and the differences between accrual basis and cash basis.

2. The amount reflected by the cash flow. Generally speaking, from the classification of cash flow and the setting of report items, most cash flows are listed separately by income and expenditure items, that is, the total amount reflects the most appropriate division of cash flow and can fully reflect the information of cash flow. However, for cash received and paid on behalf of customers and cash flow items with fast turnover, large amount and short term, it is not necessary to know the total cash income related to it, and it can provide more accurate and useful information for users of accounting statements by reflecting it in net amount. If the cash income at the time of disposal should be reflected by the net amount after deducting the corresponding expenses, the funds raised by entrusting financial enterprises such as securities companies to issue stocks or bonds should offset the fees and other expenses directly paid by financial enterprises.

Second, the classification of cash flow and the judgment of inflow and outflow

Similar to international accounting standards, the cash flow in the positive statement of Chinese enterprises can be divided into three categories: cash flow generated by operating activities, cash flow generated by investment activities and cash flow generated by financing activities. Each kind of cash flow is divided into cash inflow and cash outflow. In practice, the division of various flows is different, which can be judged according to the specific business or the specific situation of the non-cash account corresponding to the cash account (because the business that generates cash flow in the positive table must be the business that increases or decreases both the cash account and the non-cash account, that is, the cash account and the non-cash account are corresponding accounts).

1. Cash flow from operating activities. Business activities refer to all transactions and matters of an enterprise except investment activities and fund-raising activities. For industrial and commercial enterprises, it mainly includes daily business activities such as production, supply and sales, as well as transactions or events that cannot be classified as investment or financing activities. Generally speaking, its corresponding non-cash accounts will involve current assets (except dividends receivable, interest receivable and short-term investments), most current liabilities and profit and loss accounts. The specific division of cash inflow and cash outflow should be judged according to the business category or function of the enterprise. As a seller or provider, the inflow of direct and indirect economic benefits brought by an enterprise should be regarded as cash inflow, such as main business income, VAT output tax, accounts receivable and advance receipts, discounted bills receivable, cash discount and other operating financial expenses. Generally speaking, the cash flow generated by business activities will cause the credit amount of non-cash accounts (because the borrower's cash account is the corresponding account), but if the opposite event or transaction occurs, such as sales return, it should also be treated as cash inflow, but it should be filled in as a negative number; If an enterprise acts as a buyer or producer of inventory and a seller at the same time, resulting in direct or indirect outflow of economic benefits, it should be treated as cash outflow, such as purchasing inventory or accepting labor services, advertising, paying various taxes and fees, etc. Generally, it will also cause the debit amount of non-cash accounts. Of course, for the purchase return, the cash outflow is also negative. For non-cash business activities, since cash flow is not involved, it should be summarized and excluded when calculating the flow.

2. Cash flow from investment activities and financing activities. Investment activities refer to the purchase, construction and investment disposal activities of various long-term assets that are not included in the scope of cash equivalents, which mainly reflect the internal and external investment activities and related activities of enterprises. The non-cash subjects involved generally include non-current assets, dividends or interest receivable related to investment, labor costs and material costs related to the purchase and construction of fixed assets and related taxes and fees. Financing activities refer to activities that lead to changes in the scale and composition of enterprise capital and debt, mainly reflecting the financing and repayment activities of enterprises (including equity funds and non-operating debt funds). The non-cash subjects involved generally include owner's equity, long-term liabilities, short-term loans, dividend payable, interest and other non-operating liabilities. Because financing activities and investment activities involve a long time, cash inflow and cash outflow can be divided according to the time point of specific activities (occurrence time or subsequent time points such as holding and expiration). For example, when an investment activity occurs or a subsequent financing activity occurs, there is a debit amount in a non-cash account, which should be regarded as a cash outflow; At the subsequent time of investment activities or financing activities, non-cash accounts with credit amount shall be regarded as cash inflow. For investment and financing activities that do not involve cash receipts and payments, although they are not considered when calculating positive cash flow, they should be reflected in the supplementary information of the cash flow statement because of their significant impact on cash flow in the subsequent period.

3, for some special projects, should be divided according to the specific source and use of cash flow. For example, (1) natural disaster losses and insurance claims, if accurately identified, belong to the loss of current assets and should be included in the cash flow generated by operating activities; The loss of fixed assets shall be included in the cash flow generated by investment activities. If not, it can be included in the cash flow generated by operating activities. (2) Interest, if it belongs to discounted bills receivable or interest due and general handling fee, shall be regarded as cash flow generated from operating activities; If it belongs to the cash interest income of debt investment, it is regarded as the cash flow generated by investment activities; If the loan interest belongs to different purposes and the rental fee paid for financing fixed assets, whether it is capitalized or expensed (that is, different expenditure channels), it will be regarded as the cash flow of financing activities. For deposit interest income, if there is no loan interest expense, it should be regarded as "other cash received related to operating activities" in the cash flow of operating activities, without adjusting supplementary information; If there are borrowing costs, the balance after deducting deposit interest income will be used as cash outflow from financing activities and adjusted in supplementary materials. (3) All taxes and fees paid (including taxes and fees incurred in the current period and previous periods), if capitalized, such as farmland occupation tax, shall be regarded as cash flow generated by investment activities; Otherwise, it should be regarded as the cash flow generated by operating activities. (4) The cash actually paid by an enterprise to and for employees shall be judged according to the nature of the employees' work and the customers they serve. Workers in construction projects shall be included in the cash flow generated by investment activities; Other cash flows from operating activities.

Third, the direct method and the compilation of positive tables.

As one of the two methods of compiling cash flow statement, the direct method directly reflects cash flow according to the main categories of cash income and expenditure on the basis of various profit and loss items in the income statement, and the direct method is mainly suitable for reporting positive statements. Because the business reflected in the positive table generally takes cash account and non-cash account as corresponding accounts, there are two methods to calculate the current amount of cash account.

1, classified filling method. According to the current amount of cash account (actually the current amount of cash receipt and payment of related non-cash accounts), it is classified and compiled. Its basic principle is the bookkeeping rule of the debit and credit bookkeeping method, that is, "if there is a loan, there must be a loan, and the loan must be equal." For example, the term "cash received from selling goods and providing services" = cash received from selling goods and providing services in the current period+accounts receivable and notes receivable in the previous period+accounts received in advance in the current period-cash returned from sales in the current period+bad debt losses recovered in the previous period. This method has a large workload of manual operation, and is suitable for cases where there are few items or computer operations in computing business.

2. Analysis and filling-in method. Prepare by summarizing the amount of non-cash accounts. Generally speaking, it is based on the current year's amount of related items in the income statement, combined with the difference between the ending amount and the beginning amount of related items in the balance sheet (that is, the total amount of the current period) and the records of some subsidiary ledgers of related subjects (especially the three-level subsidiary ledger of VAT payable), to analyze and calculate the amount of cash flow items. Its basic principle is the basic relationship between the four elements of account (that is, ending balance-opening balance = current increase-current decrease) and the bookkeeping rules of debit and credit bookkeeping method.

When calculating positive cash flow, please pay attention to the following questions:

1, and accurately grasp the application scope of the two methods. Both of the above methods can be used to calculate the cash flow generated by active business activities, but because the data of income statement and balance sheet are relatively easy to obtain, the analytical filling method is generally chosen. When calculating the cash flow generated by positive investment activities and financing activities, due to the infrequent occurrence of business, you can refer to the classification and filling method. In actual operation, you can fill in these two parts of the flow first, and then calculate the cash flow generated by operating activities.

2. Pay attention to the judgment of positive and negative symbols in calculation. When calculating the cash inflow, it should be based on the credit amount of the account corresponding to the classified filling method or the summary number of the related items of the analysis filling method, and the debit amount should be filled with a "-"; On the contrary, when calculating cash outflows, the situation is just the opposite. Especially when the analytical filling method is used, for some items in the balance sheet, the amount summary is written off according to the balance difference, so the direction of the amount summary can be judged according to the direction of the normal balance of the item, for example, the difference between the ending balance and the opening balance of the asset item is in the debit side and the debt item is in the credit side; In addition, if the items involved in the income statement should generally be used as the starting point of judgment; The amount direction of some special items should be judged according to the specific business, such as the interest of bill discount, sometimes in the credit and sometimes in the debit, so the symbols should also be analyzed in detail.

3. When using the classified filling method, we should pay attention to the transactions or events that only involve cash receipt and payment in combination with the above judgments on cash inflow and outflow. In the specific calculation, because the business volume may not be large, it can be judged by combining different time points, and attention should be paid to excluding non-cash activities sometimes involved at the same time.

4. When using the analytical filling method, we should consider the changes of items or accounts related to specific cash flow items in the balance sheet and income statement. At the same time, we should pay attention to the differences between some balance sheet items and accounts and the reflection of other related cash flow items to avoid omission or double counting.

For example:

(1) When filling in the item of "cash received from selling goods and providing services", we should consider the differences in the amount or balance of the main business income, other business income related to business activities, accounts receivable, bills receivable and accounts received in advance, as well as the taxes payable-VAT payable (output tax) and taxes payable. The calculation starts from "main business income" (credit amount), and the credit amount is positive and the debit amount is negative when summarizing. At the same time, since the bad debt reserve related to accounts receivable has been deducted from the ending balance and opening balance of accounts receivable in the balance sheet, the difference between the changing amount of accounts receivable (that is, the balance difference of accounts receivable) and accounts receivable, that is, the bad debt reserve related to accounts receivable accrued in this period (that is, the difference between the ending balance and opening balance related to accounts receivable) should be considered. The decrease of creditor's rights receivable caused by non-cash debt restructuring is not considered when calculating cash flow, but should also be added, because it has been deducted from its balance, and the sign is the same as that of accounts receivable (that is, negative).

(2) When filling in the item of "cash payment for goods and services", the remittance amount in the report items such as "main business cost", "other business expenses", "inventory", "notes payable", "accounts payable" and "input tax payable" should be considered. The calculation starts from the "main business cost" (debit amount), and the summary debit amount is positive and the credit amount is negative. The manufacturing cost of inventory includes manufacturing costs such as depreciation, amortization of major repairs and labor costs such as wages and welfare expenses. The former does not involve cash flow, and the latter is listed separately in the item of "cash paid to and for employees", so it should be deducted separately. Since the increase in inventory is on the debit side (this item is positive), this part should be negative when calculating. Like the receivable creditor's rights, the decrease of the payable creditor's rights caused by the reorganization of non-cash debts should also be compensated, and the symbol of calculation should be the same as that of accounts payable (that is, negative number). For inventory depreciation reserve, it should also be supplemented (with the same symbol as inventory, both positive) to eliminate the difference between report items and accounts.

(3) When filling in the item of "cash paid to employees", we should consider the debit amount of the subsidiary ledger of wages and welfare expenses of production costs, manufacturing costs, management costs, operating expenses and other subjects, as well as the report items of wages payable and welfare expenses payable. In summary, the debit amount is positive and the credit amount is negative. As this item is used to calculate the debit amount of payable wages and payable welfare expenses, it can be calculated reversely according to the balance difference and the current credit amount (corresponding to the debit amount of the subsidiary ledger related to the cost expense account). As for the wages and welfare expenses of retirees and construction workers, the former is listed separately in the item of "other cash paid related to business activities", while the latter is included in the item of "cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets" in investment activities, so it should be deducted separately in calculation.

(4) When filling in the tax payable item, the difference between the debit amount of the main business tax and surcharge, income tax and the tax payable-paid (or unpaid) value-added tax sub-ledger and the balance of other business activities tax sub-ledger in the tax payable and other payables should be considered. Because this item is used to calculate the debit amount of tax related to business activities in the tax payable account, it can be calculated back according to the difference between its balance and the current credit amount (that is, the corresponding income tax and other profit and loss items). The value-added tax and income tax refunded in this period belong to cash inflow, which is reflected in the item of "tax refund received".

Four, the indirect method and its supplementary information in the preparation of cash flow generated by business activities.

The starting point of indirect calculation is the net profit of the income statement. When adjusting and calculating the cash flow generated by operating activities, it can be divided into two parts: (1) adjusting non-operating profit and loss, that is, adjusting net profit to net non-operating income. For example, the gains and losses from the disposal of fixed assets, intangible assets and other long-term assets, the loss from scrapping of fixed assets, financial expenses (non-operating activities), investment gains and losses, asset impairment reserves (excluding bad debt reserves and inventory depreciation reserves) and other items. In the specific calculation, we should reduce non-operating income and increase non-operating losses or expenses. (2) The adjustment of accrual basis and cash basis causes the difference of operating activities, that is, the net operating income is adjusted to the net cash flow generated by operating activities. Including: (a) businesses that affect net operating income but do not generate cash flow from operating activities. For example, provision for asset impairment (bad debt provision and inventory depreciation provision), depreciation of fixed assets, amortization of intangible assets, amortization of long-term prepaid expenses, decrease or increase of prepaid expenses, increase or decrease of accrued expenses, etc. In the specific calculation, the cost items should be increased. You can also combine the starting point of net profit (credit amount) and judge whether it is positive or negative according to the specific situation of non-expense items (such as accumulated depreciation), in which the credit amount is positive; The debit amount is negative. For example, when the prepaid expenses decrease, the credit amount should be positive (positive:), and when it increases, the debit amount should be negative (negative:). (b) Business that does not affect net operating income but generates cash flow from operating activities. For example: decrease or increase of inventory, decrease or increase of operating accounts receivable, increase or decrease of operating accounts payable, credit or debit of deferred taxes, etc. The specific calculation should be combined with the starting point and summarized according to the specific situation of the amount of non-fee items, in which the credit amount should be positive; The debit amount is negative.

The adjustment idea of the above indirect method has great enlightenment for the analysis of income quality in cash flow analysis. For example, the net income operation index reflects the ratio before and after the first part adjustment, highlighting the proportion of net operating income to net profit; The cash operation index reflects the ratio before and after the adjustment of the last part (that is, the second part (b) above).

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