SECTIONS
There are three fields that are used to set up a statement of cash flows report within Accounting. They are:
- Reclassify Profits
- Cash Flow Category
- Cash Flow Line Summary
You define the default values at general ledger account (GLA) level, but you can override these values on the transaction line. See General Ledger Account Fields and Transaction Fields for more information.
If you leave the cash flow analysis fields all blank at GLA level, or set them to None, the value of the corresponding transaction lines will not be adjusted in the statement of cash flows.
If you leave the cash flow analysis fields all blank at transaction line level, or set them to None, the transaction will use the GLA defaults.
Reclassify Profits
This is a checkbox at each level that when selected indicates that you want to adjust the section in which the value of a transaction line will appear. It is used in conjunction with the Cash Flow Category field.
Cash Flow Category
This is the heading under which the value of a transaction line will appear on the statement of cash flows report. The options are as follows:
- Operating Activities
- Investing Activities
- Financing Activities
- Other
- Not Cash Flow Adjustable*
* on the transaction line only
Examples
"Interest received” (GLA: 7000 - Interest Income) is a cash flow item that is already included in the Net Profit by virtue of the fact that its GLA type is "Profit and Loss". If the cash flow fields on the GLA were left blank, then transactions using that GLA would be included in the Net Profit under Operating Activities in the statement of cash flows report. However, interest received is normally considered to be an investing cash flow, so it would be more accurate to remove it from the Operating Activities section of the report and add it to the Investing Activities section.
| Reclassify Profits | Cash Flow Category | Effect |
|---|---|---|
|
Investing Activities | Moves the value of the corresponding transactions (interest income in the example) from Operating Activities to Investing Activities. |
|
|
Financing Activities | Moves the value of the corresponding transactions from Operating Activities to Financing Activities. |
Cash Flow Line Summary
This field, also at each level, is a picklist of text values used to group transactions on the statement of cash flows report. This is useful when the value that you want to group by doesn't already exist in your chart of accounts.
Some examples are listed here but you can add to or amend them.
- (Gain) / Loss on Foreign Exchange
- (Increase) / Decrease in Inventory
- Deferred Revenue
- Depreciation & Amortization
- Dividends on Common Shares
- Dividends Received
- Impairment
- Increase / (Decrease) in Common Capital
- Increase / (Decrease) in Tax Liability
- Interest Expense
- Interest Income
- Purchase of Fixed Assets
- Purchase of Investment Securities
- Research & Development
- Sale of Investment Securities
- Sales Proceeds from Disposal of Fixed Assets
Example
In the Operating Activities section of the report, we might show a GLA name such as "Gain on Sales of Assets". However, when transactions using that GLA are moved to Investing Activities you might want to group the values in "Equipment Disposals" and "Equipment - Depn on Disposals" under the heading "Fixed Assets: Sales Proceeds". You can't do this using any of the Trial Balance or Balance Sheet hierarchies.
To do this, enter "Fixed Assets: Sales Proceeds" as the Cash Flow Line Summary value for all three GLAs.
Updating the Reporting Balances
You must run a Full Synchronization of Reporting Balances after adding or amending any default cash flow analysis value at GLA level.
This is not necessary after entering cash flow analysis values at transaction line level. The reporting balances are updated automatically in this case.
See About Reporting Balances for more information.