Purpose Purpose of consolidated cash flow statements is to provide information about cash flows of a business group for an accounting period. Standards Scope of Funds Scope of funds used for preparing cash flow statements is cash and cash equivalents.
Cash is cash on hand and demand deposits.
Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant risk to changes in value. In such cases, cash and cash equivalents held by the newly acquired entity should be deducted from the cash outflows on investments in the entity, and cash and cash equivalents held by the entity in which investments are disposed of should be deducted from cash inflows on dispositions of the investments in the entity. In preparing consolidated cash flow statements, cash flows between consolidated entities should be offset and eliminated. Translation differences on cash and cash equivalents should be displayed as distinguished from others. If the scope of funds is changed, the description, the reason, and the effect of the change.