Preview

Aci Financial Statement

Good Essays
Open Document
Open Document
5595 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Aci Financial Statement
ASA University Review, Vol. 6 No. 2, July–December, 2012

Cash Flow Statement Disclosures in Pharmaceutical Companies: Bangladesh Perspective
Mst. Joynab Siddiqua* Mohd. Takdir Hossan* Abstract
Cash flow statement is a vital part of the financial statements. Preparation of cash flow statement is required as per Companies Act 1994 and the public limited companies enlisted with stock exchange are to prepare this statement as per other statutory laws and regulations. The acceptance of International Accounting Standard- 7: Cash Flow Statement has added a new dimension to the preparation and presentation of financial statements in Bangladesh. The companies are now preparing this statement as an integral part of their financial statements. This paper examines empirically the current practices followed by sample companies in preparation of cash flow statement and concludes that the sample companies are in line (with few exceptions) with the requirements of International Accounting Standard (IAS)-7 or Bangladesh Accounting Standard (BAS)-7. It also proposes some suggestions for improving the presentation of the statement

Key words: Cash flow statement, IAS/BAS, Listed Company, Disclosure.

Introduction
The purpose of a cash flow statement is to provide information on the cash flow from a company’s operating, investing and financing activities to enable the users of its financial statements to evaluate the ability of the company to generate cash and to use the historic cash flows to predict future cash flows. The cash flow information enhances the comparability of the operating performance by various companies, because it eliminates the effects that arise from the use of different accounting treatments for the same transactions and events. The use of cash flow information is gaining importance in the analysis of financial statements (Epstein 1991; Yap 1997; Jones and Widjaja 1998; Previts and Bricker 1994). Cashflow information is considered less open to manipulation than


References: Annual Reports of Sample Pharmaceutical Companies Listed in Dhaka Stock Exchange and Chittagong Stock Exchange 2009. Aziz Uddin, A.B.M and Bala., S.K.( 2001), “Cash Flow Reporting in Bangladesh”, The Cost & Management, Nov- Dec. ICMAB, p. 13. FASB Discussion Memorandum (1980), Reporting Funds Flow, Liquidity and Financial Flexibility, FASB, Stanford. Thomas H. Beechy. Joan E. D. Conrod, Intermediate Accounting, second Edition, Chpter 5, Exhibit 5-1 pp.191 Ghosh, Santi N. (2001),“Workshop Material on IAS # 7 : Cash Flow Statements” compiled under the Institute of Chartered Accountants of Bangladesh (ICAB)Project, Development of Accounting and Auditing Standards in Bangladesh, The World Bank. Government of Bangladesh (GOB) (1994), The Companies Act 1994 (Act No. 18 of 1994). Gup, B.E. & Samson, W.D. 1993. An analysis of patterns from the statement of cash flows. Financial Practice & Education, 3(2):73-79. Hendrickson, Eldom.S(1982), Accounting Theory, Richard D. Irwin, Inc., Illinois, p. 236. Hertenstein, J. & McKinnon, S. 1997. Solving the puzzle of the cash flow statement. Business Horizons, 40(1):69-76. International Accounting Standards Committee (IASC) (2000), International Accounting Standards 2000 International Accounting Standards Committee, London, “International Accounting Standard IAS 7 (revised 1992): Cash Flow Statements” in pp. 139165.International Federation of Accounting (IFAC) (1992), IFAC Handbook 1992: Technical Pronouncements (New York: IFAC). “IAS 7 (October 1977): Statement of Changes in Financial Position” in pp. 812- 816. Khan, M.H. & Akter, M.S. & Ghosh, S.K (2005), “Cash Flow Statement Disclosures: A Study of Banking Companies in Bangladesh”. Available at www.pcte.edu.in/site/OJMR/Finance/cashflow.pdf Keiso, Donald, E.and Jerry.J.Weygandt (1998), Intermediate Accounting, John Wiley & Sons, Inc. New York, 9th Edition, pp. 1275-76. Lee, T.A. 1982. Cash flow accounting and the allocation problem. Journal of Business Finance & Accounting, 9(3):341-352. Lee, T.A (1972), “A Case for Cash Flow Reporting”, Journal of Business Finance, Vol. 4, No. 2, pp. 27-36 as quoted in Studies of Accounting Theory, Steyn, B.W. & Hamman, W.D. 2003. Cash flow reporting: are listed companies complying with AC 118? Meditari, 11:167-180. Weygandt, Kieso, Kimmel, Accounting Principles, 9th edition, John, Wilely and Sons, Inc, pp. 732-733 Wallace, R.S.O. and Choudhury, M.S.I.And Pendelbary, M.(1997), “Cash Flow Statements: An International Comparison of Regulatory Positions”, The International Journal of Accounting, Vol. 32, No, 1, pp. 1-22 Cash Flow Statement Disclosures in Pharmaceutical Companies 221 Appendix-1 List of the twelve Pharmaceutical companies studied. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. GlaxcoSmithKline Bangladesh Limited (2009) The IBN SINA Pharmaceutical Industry Ltd. (2009) BEXIMCO PHARMACEUTICAL LTD. (2009) ORION INFUSION LTD. (2009) ACI Formulation Limited (2009) Ambee Pharmaceutical Limited (2009) Square Pharmaceutical Ltd. (2009) Libra Infusions Limited (2009) BEACOM Pharmaceuticals Limited (2009) Rahman Chemicals Limited (2009) Renata Limited (2009) Therapeutics (Bangladesh) Limited (2009)
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    xacc 291 week 7
    • 391 Words
    • 2 Pages

    xacc 291 week 7

    The term cash flows refer to the receipts and payment of cash. A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents is known as a statement of cash flow. Similar to an income statement, a cash flow statement records a company’s performance over a period of time. Consistently, companies will disclose the cash arising are generally required to prepare a statement of cash flow in their annual reports because it contains vital information for lenders and investors who primarily make informed and economic decisions about the companies. Generally during a company’s accounting period their cash flow is categorized and divided into three sections which are: cash flow from operations, financing and investing. The primary reasons these transactions are catergorized and divided is so investors will understand what the transactions are related to and how each section paints a vivid picture of how the company is doing from both a cash standpoint and overall health. The statement of cash flow is very important for companies that are required to prepare and present their financial statement in accordance to with international accounting standards and international financial reporting standards.…

    • 391 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Telus Valuation Summary
    • 4912 Words
    • 20 Pages

    Telus Valuation Summary

    Cash flow analysis is a method of analyzing the financing, investing, and operating activities of a company. The primary goal of cash flow analysis is to identify, in a timely manner, cash flow problems as well as cash flow opportunities. The primary document used in cash flow analysis is the cash flow statement. The cash flow statement is useful to managers, lenders, and investors because it translates the earnings reported on the income statement—which are subject to reporting regulations and accounting decisions—into a simple summary of how much cash the company has generated during the period in question.…

    • 4912 Words
    • 20 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Case 2 Bucks
    • 674 Words
    • 3 Pages

    Case 2 Bucks

    relevant accounting literature and guidance on how to present the related cash flows in its…

    • 674 Words
    • 3 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Acc291
    • 267 Words
    • 2 Pages

    Acc291

    Companies use a statement of cash flows because it shows where cash came from and how it was used. The other main financial reports only provide a limited insight into the cash transactions of the company. While the other main reports utilize the accrual accounting basis, the statement of cash flows changes the accrual basis using the direct or indirect method. The indirect method is primarily used, however both are acceptable under generally accepted accounting principles. The statement of cash flows is divided into three sections and shown in the report in the following order. Operating activities is reported first, followed by investing activities, and finally financing activities. Operating activities deals with each transaction that involves both revenues and expenses. This category is considered important because operating activities are the best predictor of a company’s ability to generate future cash. This obviously is important information for investors as well as creditors when evaluating a company’s ability to grow and move forward. Investors can make educated guesses regarding the future cash flows based on the statement of cash flows better than viewing the other financial reports that utilize the accrual accounting basis. Investing activities include the transactions to purchase, sell, or dispose of company property. Loans and debt collection are also included in the investing activities with company plant and equipment. Investors can view the statement of cash flows to see if the company has sufficient cash on hand to pay stockholder dividends and meet future demands. Finally, financing activities includes receiving cash from stockholders, buying back company stock, and paying dividends.…

    • 267 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Acc/291 Weekly Reflection
    • 305 Words
    • 2 Pages

    Acc/291 Weekly Reflection

    The statement of cash flow is one of the main financial statements which investors rely on to measure a company’s financial strength. Some investors are very much interested in this statement because they absolutely want returns on their investment. The cash flow statement identifies the cash is flowing in and out of the company. If a company is consistently generating more cash than it is using, the company will be able to increase its dividends, reduce debt, and acquire other businesses. All of this is perceived to be good for investors.…

    • 305 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    (Wal-Mart) Global Environments
    • 2438 Words
    • 10 Pages

    (Wal-Mart) Global Environments

    The statement of cash flow defines the financial activities during a reporting period for a company. The cash flow statement will define the interest, sale of debt or securities or the purchase of debt or securities with the exception of investments and financing activities that do not require the use of cash.…

    • 2438 Words
    • 10 Pages
    Better Essays
    Read More
  • Powerful Essays

    Business Plan for Wash Dry and Guard Detailing
    • 15669 Words
    • 63 Pages

    Business Plan for Wash Dry and Guard Detailing

    Luehlfing, M. S., & Hillstrom, L. (2008, May 18). Cash flow analysis and statement. Retrieved from Encyclopedia of Business, 2nd ed Web site: http://www.referenceforbusiness.com/management/Bun-Comp/Cash-Flow-Analysis-and-Statement.html…

    • 15669 Words
    • 63 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Encom Corporation
    • 369 Words
    • 2 Pages

    Encom Corporation

    For investment and operations purchases cash flow cannot be ignore but for a corporation’s performance every period the earnings are the best measure. The earnings number is the best matching of revenues and expenses. In cash flow the connection between expense and revenues is distorted.…

    • 369 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Week 1 Financial Statement review Walt Disney World
    • 354 Words
    • 2 Pages

    Week 1 Financial Statement review Walt Disney World

    Management and investors would use the statement of cash flows to determine the company’s financial health over a period of time. The users of these statements find the cash flow statement to be informative as it cannot be manipulated, such as net income.…

    • 354 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Accrual Method
    • 366 Words
    • 2 Pages

    Accrual Method

    What is the importance of the statement of cash flow in the financial management of…

    • 366 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Cash Flows
    • 780 Words
    • 4 Pages

    Cash Flows

    The cash flow statement reports a company’s inflow and outflow of cash. While an income statement provides the information about whether or not a company made a profit, a cash flow statement can tell you whether the company generated cash. The cash flow statement also provides information regarding investing and financing activities that do not require the consumption of cash. All of these aspects are important for a company management to monitor because they all have such a strong effect on the financial health of the company. The examination of the cash flow statement should be a high priority for potential investors; the amount of money that flows in and out of a company is something that investors might want to monitor.…

    • 780 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Relationship between Various Financial Statements
    • 651 Words
    • 3 Pages

    Relationship between Various Financial Statements

    Financial statements are demonstrated in four different financial statements, which are balance sheet, income statement, retained earnings, and statement of cash flows. A balance sheet illustrates a financial picture at a point of time of what a business owns, which are the assets and what it owes, which are the liabilities. The income statement portrays how well a business performed during a period of time; and it reports revenue and expenses. The retained earnings statement indicates how much dividends are distributed and how much was retained in the business for future growth. Finally, the statement of cash flows presents the cash use in a business (Kimmell, et al, 2009).…

    • 651 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Accounting Syllabus
    • 3900 Words
    • 16 Pages

    Accounting Syllabus

    Note: Send all queries related to the course material to Weiwei Wang (email: wxw107020@utdallas.edu). She will get back to you within 24 hours. If she does not do so, then send me an email. Weiwei will try to address your questions and, if needed, discuss your questions with me and will get back to you with answers. Course Pre-requisites, Co-requisites, and/or Other Restrictions There are no pre-requisites for this class. Course Description This course provides an introduction to the concepts of financial accounting with an emphasis on the interpretation of financial statements. Specifically it covers how to prepare financial statements (income statement, balance sheet, and statement of cash flows) and how to utilize information contained in financial statements. The course also covers in detail how financial statements report the financial effects of certain important types of transactions that firms commonly undertake. Student Learning Objectives/Outcomes  Summarize the information provided by the balance sheet, income statement and statement of cash flows and interpret individual amounts  Compute financial ratios and use financial ratios and other information to compare companies competing in an industry in terms of profitability and liquidity  Recognize ethical issues in reporting financial results and assess the impact of these issues on shareholders and other external users of the information Text: Introduction to Financial Accounting, 10th ed. (ISBN: 0136122973), C. Horngren, G. Sundem, J. Elliott and D. Philbrick, Prentice Hall. Cases in Financial Reporting, 7th ed, Engel, Hirst and McAnally, Cambridge Business Publishers. (Note:…

    • 3900 Words
    • 16 Pages
    Powerful Essays
    Read More
  • Better Essays

    Acc 291 Week 4
    • 1112 Words
    • 5 Pages

    Acc 291 Week 4

    In any industry, have a clear picture of an organizations cash, and the flow of where it goes is an important part of a successful organization. Many organizations use different methods of accounting to view financial information. But some of the methods don’t provide certain information that is when the Cash Flow Statement comes into play. For example the balance sheet, income statement, and retained earnings statement only provide a limited amount of information regarding an organization cash flow (cash receipts and cash payments). For example, balance sheets will show the increase in property, plant, and equipment during a year. Although they do not show how the additions were financed or paid for. The income statement shows an organizations net income, it does not give a clue about the amount of cash generated by operating activities. Retained earnings statement shows cash dividends declared but not cash dividends that are paid during a year. What makes Cash Flow Statements so important is that they provide a detailed summary of where cash came from and how it was used compared to the other reports.…

    • 1112 Words
    • 5 Pages
    Better Essays
    Read More
  • Good Essays

    Acc 291 Learning Team Reflection Wk 5
    • 662 Words
    • 3 Pages

    Acc 291 Learning Team Reflection Wk 5

    A report of cash flows indicates the receipt and payment of cash for the organization. The direct method is desired by the FASB, even though both ways are acceptable, and shows cash receipts and payments in operations whereas the indirect method changes net income which does not influence cash. To get commenced with a report of cash flows, the organization must change its net income from an accrual basis to a cash basis. Ultimately, an organization may decide their free cash flow to find out the amount of money is remaining after adjustments for capital expenses and dividends have been completed.…

    • 662 Words
    • 3 Pages
    Good Essays
    Read More

Related Topics