Published on June 24, 2015
Indirect Method vs. Direct Method. Financial statement preparers have two choices in preparing the statement of cash flows: the indirect method and the direct method. The indirect method is used extensively in practice even though the F.A.S.B. has expressed a preference for the direct method. Discuss the similarities and differences between the direct and indirect methods, and the advantages of using each method. Your answer should illustrate understanding of the cash flow statement. A minimum of 100 to 200 words is required for your answer. Respond to at least two of your classmates’ posts.