Statement of cash flows

Statement of cash flows is a period-end report explaining the sources and uses of cash during a reporting period.

Also known ascash flow statement

ByHoang TruongUpdated June 30, 2026

See it move

Loading infographic...

A waterfall chart opens at a beginning cash balance of €10,000. Three sequential bars follow: operating activities contribute a positive €30,000, investing activities consume €15,000, and financing activities consume a further €8,000, resolving to a closing cash balance of €17,000. The layout mirrors the three-section structure of the statement of cash flows and makes the contribution — or drain — of each activity to the period's net cash movement immediately visible.

Where it fits

SubjectFinancial AccountingCoreTopicThe Financial StatementsCore

The formula

LaTeX

\Delta\text{Cash} = CF_{\text{op}} + CF_{\text{inv}} + CF_{\text{fin}}

Variables

$C F_{o} p$: Net cash from operating activities (€)
$C F_{i} n v$: Net cash from investing activities (€)
$C F_{f} in$: Net cash from financing activities (€)

The three sections together explain the full movement in the cash balance over the period.

Check yourself

PracticeCORE

A company pays €15,000 to purchase new office computers. In which section of the statement of cash flows does this payment appear, and why?

Select an answer to check your understanding.

If you trained under a national GAAP

DE · HGBWhere national-GAAP intuition diverges from the international standard

HGB (German)

HGB does not require individual companies (Einzelabschluss) to present a cash flow statement; the obligation applies only to groups preparing consolidated accounts, where DRS 21 governs the format. Under DRS 21, interest paid and interest received are classified within operating cash flows for most entities, leaving limited discretion over their placement within the statement.

IFRS

IAS 7 requires a statement of cash flows for every set of financial statements presented, without exception, whether for individual companies or groups. Entities may choose between the direct and indirect methods for the operating section. Accounting policy choices permit interest paid to be shown as operating or financing, and interest received as operating or investing, meaning two IFRS reporters can legitimately classify identical cash items in different sections — a degree of flexibility that does not exist under DRS 21.