difference in working capital for cashflow statement and balance sheet

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ibano
Posts: 1
Joined: 26 Aug 2019, 21:00

difference in working capital for cashflow statement and balance sheet

Post by ibano »

Hello IFRS community,

nice and i hope helpful community. A few words about me: I am 40 years old, an electrical engineer and unfortunately very unskilled regarding ifrs. I need it to better understand business reports for stock analyzing.

One question is the difference when calculating working capital difference (inventory, accounts receivable) in cashflow statement and balance sheet. Why it's not exactly the same difference in balance sheet and cash flow statement? Is it possible to calculate the same results in the annual report with the presented informations.

Hope someone can explane it.


Best regards,

ibano
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Marek Muc
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Joined: 15 Oct 2018, 17:21
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Re: difference in working capital for cashflow statement and balance sheet

Post by Marek Muc »

Hi, it won't be the same. There are many impacts on balance sheet items that do not impact cash flow statement or are presented in different lines. Eg foreign exchange movements, changes in scope of consolidation.

You won't be able to reconcile balance sheet changes to cash flow statement in most cases, you need to trust the reporting entity and its auditors :)
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