The FASB and IASB prefer the direct method of reporting operating cash flows on the statement of cash flows.

Question

Quizplus · Accepted Answer

Both the FASB and IASB encourage the use of the direct method of reporting operating cash flows on the statement of cash flows as it provides more useful and transparent information to users compared to the indirect method. However, the use of either method is permitted by both accounting standards.

The FASB and IASB Prefer the Direct Method of Reporting