Internal Memo
This is to clarify the significance of some of the financial procedures adopted by the company in
offering clear financial statement analysis. The cash flow document is an essential document that
guides the financial plan for the company. It is a document that relates the financial information
to investors, creditors and other interested parties with more clarity. Every shareholder uses the
statement to assess and understand the financial performance of the company. The report grants
all the internal team a chance to know the financial position of the company. Thus they can make
informed decisions on whether they can invest in the organization (Yap, 1997). Therefore, it
should be seen as an informative investment tool, meant for courting investors. With such a
precise financial information, it is equally easy for the organization to evaluate how the
organization is performing against its targets and its peers. With that, the management gets to
know the necessary improvements and adjustments needed. It is a tool that is quite important for
managers, creditors or investors. It is thus used to evaluate the financial health of the
organization.
Finances and resources are the lifelines of any trade. According to Global Accounting Standards
Principles (GAAP), there is the need to convert from local GAAP when preparing joined
financial statements. At the conceptual level, The International Financial Reporting Standards
are regarded as more of "principles-based" regulations while accounting standard in contrast to
U.S. GAAP regulations is considered to be more "rules-based." By being more "principlebased," IFRS, arguably, represent the economics of a transaction (Flood, 2016). The financial
statement is used alongside other relevant financial statements and is an essential aspect of for
any company to use. GAAP covers a comprehensive set of ethical principles precisely developed
by the Securities and Exchange Commission to set standards for accountants and other financial
professionals (Flood, 2016). Most financial practitioners use the acknowledged book-keeping
codes as a guide for recording, analyzing and giving out fiscal material.
The GAAP regulations run on the flowing codes and ethics:
nuity of techniques (coherence and comparisons)
-compensation (zero debt expense)
-interruption of business)
riodicity (regular dates for business transactions)
This document covers the core financial elements such as profits, losses, capital, assets, equity,
etc. Every shareholder uses the statement to assess and understand the financial performance of
the company (Hales & Orpurt, 2013). The report ought to be detailed enough about the
accounting as mentioned earlier information. The cash flow report offers insights about investing
activities, operating activities, and financial engagements. It also gives an idea about the overall
attractiveness of investing and financing activities within the company; the inflows and outflows
of cash in and out of the organization (Hales & Orpurt, 2013). The other sheets will let you see
the accounts of the business and the transactions made from the report.
References
Flood, J. (2016). ASC 230 Statement of Cash Flows. Wiley GAAP 2017 - Interpretation And
Application Of Generally Accepted Accounting Principles, 69-90. doi:
10.1002/9781119357032.ch7
Hales, J., & Orpurt, S. (2013). A Review of Academic Research on the Reporting of Cash Flows
from Operations. Accounting Horizons, 27(3), 539-578. doi: 10.2308/acch-50498
Yap, C. (1997). Users' perceptions of the need for cash flow statements — Australian
evidence. European Accounting Review, 6(4), 653-672. doi: 10.1080/09638189700000006