Statement of Cash Flows: Master IAS 7 Step by Step

Profit is an opinion. Cash is a fact.

Every year, profitable businesses run out of money and close. The statement of cash flows is the one financial statement that shows you why—where the cash actually came from, where it actually went, and whether the business can keep going. It is also the statement most learners find hardest to prepare, because it is the only one you have to build backwards, from figures that were never designed to produce it.

This course fixes that. It takes you from “I don’t really understand what this statement is for” to preparing a complete statement of cash flows, on your own, from a full set of financial statements—and then reading it the way an analyst would.

What makes this course different

We do not skip the working. Every adjustment is derived on screen, line by line, so you can see exactly where each number comes from and why it carries the sign it does. Where most courses show you a finished statement and ask you to trust it, this one builds each figure in front of you using T-accounts and the opening-and-closing-balance technique—the method that works on any item, in any exam, in any real set of accounts.

You will also learn both permitted approaches to the operating section. Most courses teach only the indirect method. Here you will prepare the operating section under the indirect method, prepare the same figures under the direct method, and prove that the two reconcile—which is the fastest way to understand what the operating section is really telling you.

What the course covers

• The economics behind the statement—why profit and cash diverge, and what that divergence signals.

• The IAS 7 framework: operating, investing, and financing activities, and how to classify anything you meet.

• The operating section under the indirect method, adjustment by adjustment, from profit before tax down to net cash from operations.

• The operating section under the direct method, plus the reconciliation back to the indirect result.

• Investing and financing cash flows derived from movements in non-current assets, equity, and borrowings.

• A full worked preparation from a complete set of financial statements, start to finish.

• The awkward items—asset disposals, revaluations, deferred tax, provisions, lease payments under IFRS 16, and foreign exchange differences.

• Interpretation: free cash flow, cash conversion, quality of earnings, and the warning signs a cash flow statement gives you before anything else does.

• The errors that cost marks and cause restatements, and a checklist to catch each one.

How the course is taught

Short, focused video lessons—most between six and twelve minutes—each covering one idea properly. Every section ends with a worked example you can attempt before watching the solution, and downloadable spreadsheets let you build the statement alongside the lesson rather than watching someone else build it. A practice workshop near the end gives you three complete preparation questions with full model answers and marking notes.

Who it is for

If you are studying accounting, sitting a professional exam, preparing accounts at work, or simply want to understand where the cash in a business goes, this course is built for you. No prior IFRS knowledge is assumed. If you can read a profit and loss account and a balance sheet, you have everything you need to start.

About the Instructor

I am a qualified accounting and finance professional with over twenty years of extensive experience in diversified industry sectors such as auditing, large-scale manufacturing, and oil and gas.

Like most accounting and finance professionals, I started my career as a finance executive and then over the years rose to the position of CFO in a multinational company in the oil and gas industry.

I have also worked as a consultant with the World Bank and the European Union on different projects in Middle East, Eastern Europe, and CIS countries during 2011 to 2018 as a principal consultant for IFRS and financial management.

I am a qualified professional with three professional qualifications: an MBA, an ACCA, and a CIMA UK. I have been teaching IFRS, financial reporting, financial management, and performance management for over fifteen years, and my focus areas are ACCA and CIMA qualifications.