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In preparing a statement of cash flows the issuance of debt should be reported separately from the retirement of debt.
Issuance of Debt
The process by which a company borrows money through the sale of bonds or taking out loans, creating a liability that must be repaid in the future.
Retirement of Debt
The process of paying off debt obligations or securities over time through systematic repayments or a lump-sum payment.
Statement of Cash Flows
A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents.
- Acquire knowledge on the differentiation of cash flows within the cash flow statement.
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Learning Objectives
- Acquire knowledge on the differentiation of cash flows within the cash flow statement.
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