According to the indirect method , the cash flow statement starts out with net income on an accrual basis before adding and removing non-cash items to reconcile to real cash flows from operations.
There are two accounting procedures that can be utilised to create a cash flow statement, and the indirect method is one of them. By changing the operating part of the cash flow statement from the accrual method to the cash method of accounting, the indirect method converts changes in balance sheet line items.
The direct technique, which records real cash inflows and outflows made during the reporting period, is the other way to complete a cash flow statement. In practise, it is more typical for larger firms to employ the indirect way. Sometimes it is simpler to use the indirect way.
To know more about Indirect method visit:
https://brainly.com/question/25717578
#SPJ4
