Format of the Statement of Cash Flow

The Statement of Cash Flow is a reconciliation of cash and cash equivalents from the beginning to ending balance. Take the prior year balance from the Statement of Financial Position and the current balance of cash and cash equivalents. The Statement of Cash Flows tells us what the change in cash and cash equivalents is during the year, calculated as the ending less beginning balance. Then it shows us the activities that make up that change in cash. Here’s the basic structure of the statement that you can use as a template moving forward:

Notice the last three lines. This is a reconciliation! The net change in cash from operating, investing, and financing activities plus the beginning cash balance should equal the ending balance in cash. Similar to the bank reconciliation, balancing cash and cash equivalents gives us confidence that errors are minimized and all transactions have been included in our accounting system.