Cash flow reporting: Do listed companies comply with AC 118?

Steyn, B W; Hamman, W. D.

doi:10.1108/10222529200300011

Cited by 2 publications

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References 2 publications

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“…During the 2001 financial year, 41% of the industrial companies that were listed in South Africa provided some form of information on this allocation (Steyn and Hamman 2003a). The separation should therefore be possible, even if it is somewhat subjective.…”

Section: Mandatory Cash Utilisation and Maintenance Of The Existing Resource Basementioning

confidence: 99%

“…It is already obligatory for the cash flows from discontinued activities to be disclosed separately. However only 21 of 60 industrial companies listed in South Africa that discontinued operations did disclose the necessary information in their 2001 financial statements (Steyn and Hamman 2003a). Buckley (1977) also promotes the disclosure of divisional and geographical cash flow segmentation, because users apply different discount rates to different divisions to estimate future cash flow.…”

Section: Discontinued Operations and Other Allocationsmentioning

confidence: 99%

“…A study of the 2001 financial statements of listed companies in South Africa (Steyn & Hamman 2003a) identified deficiencies in cash flow reporting that can be summarised as follows: l Ambiguities in the definitions of operating activities, investing activities, financing activities and cash and cash equivalents lead to differences in interpretation and impair comparability (Steyn and Hamman 2003b;Steyn, Smith and Hamman 2003). l The alternative treatment of certain items, such as interest and dividends, which are permitted by AC 118, impairs the comparability of companies.…”

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confidence: 99%

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Revamping the cash flow statement

Steyn

Hamman

2003

Meditari Accountancy Research

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In this article, modifications are suggested for the current format of the cash flow statement, which is prescribed by AC 118, in order to address ambiguities and improve comparability. This redefinition of activities, together with the alteration of the layout, leads to a better explanation of the cash‐generating function of an enterprise. The authors argue that the separation of the cash flow for the maintenance of the existing resource base and the cash flow for the expansion thereof, is essential information in a model for the prediction of the future cash flow generation of a company. The resultant increase in the accessibility, reliability and utility of cash flow reporting should enhance users’ economic decision making and liberalise financial information. The modifications proposed in the article can therefore assist standard setters to improve financial reporting.

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Section: Mandatory Cash Utilisation and Maintenance Of The Existing Resource Basementioning

confidence: 99%

Section: Discontinued Operations and Other Allocationsmentioning

confidence: 99%

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confidence: 99%

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Revamping the cash flow statement

Steyn

Hamman

2003

Meditari Accountancy Research

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“…In a study on the 2001 published cash flow statements of South African listed industrial companies(Steyn & Hamman 2003), it was found that only 26 of 287 companies reported…”

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Cash flow patterns in listed South African industrial companies

Bruwer

Hamman

2005

Meditari Accountancy Research

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A relatively simple way to analyse a company's financial status is to examine the positive or negative signs of its cash flow patterns and to link certain characteristics to selected cash flow patterns.In this article, the frequencies of cash flow patterns in South African listed industrial companies are examined for a single financial period, as well as for three different cumulative periods, ending in 1993, 1996 and 2002 respectively. Mature companies, i.e. those with positive cash flow from operating activities, negative cash flow from investing activities and negative cash flow from financing activities, were identified as the most frequently occurring pattern during the selected periods.The study shows that the mature companies had the highest median amongst the more regular cash flow patterns, for the net profit percentage, for the cash flow from operating activities before the payment of dividends as a percentage of sales and for dividend payout. The study also reveals that companies in their growth phase had the highest medians for investment outflow, for sales growth and growth in total assets, for accounts payable and inventories. Start-up companies had the highest medians for inflow from financing activities and for total debt to total assets.

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Cash flow reporting: Do listed companies comply with AC 118?

Cited by 2 publications

References 2 publications

Revamping the cash flow statement

Revamping the cash flow statement

Cash flow patterns in listed South African industrial companies

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