Outputting the Cash Flow Statement – Indirect method

The Cash Flow Statement - Indirect Method app is a powerful tool that provides users with a swift and comprehensive snapshot of the cash flow situation of their company. This application operates by sourcing information from semantic tags that are duly assigned to G/L accounts within the cash flow statement.

Let's dive into a detailed exploration of how various applications can be effectively applied to manage data flow, ultimately determining the final report output.

• The Manage Global Hierarchies app: Used to create the financial statement version (FSV) where the general ledger accounts of any chart of accounts are grouped and organized, rolling into the subtotals represented by the FSV Items (or nodes).
• Assign Semantic Tags to the Financial Statement Version: Using the same Manage Global Hierarchies app, it is required to link the semantic tags used for the cash flow statement to financial statement items or to general ledger accounts. Bear in mind that the cash flow statement mostly uses a predetermined set of semantic tags pre-delivered with SAP S/4HANA.
• The Cash Flow Statement – Indirect Method app allows the execution of the report to display the cash flow statement based on the indirect calculation method.
• Custom Analytical Queries: In certain cases, the specific semantic tags or calculation logic pre-delivered with the system might not fulfill the complex requirements of your company. Using this app, it is possible for advanced technical users to generate bespoke custom semantic tags and calculation logic.

The Cash Flow Statement – Indirect Method app allows Carlo to present a cash flow statement, calculated upon an indirect calculation methodology.

This modern solution gives Carlo the ability to visualize real-time data concerning Bike Company’s cash flow, allowing customization to cater to his company's specific needs. He can add columns or rows to detail individual accounts as required. The cash flow is calculated as follows:

In this context:

Cash flow from operational activities = Net income (or loss) + Modifications for income and expenditures that do not involve cash flows - A decrease in balance sheet items + An increase in value in balance sheet items.

Semantic tags assigned to the relevant general ledger accounts generate this financial calculation. These semantic tags are essential for understanding and organizing the financial data, offering a comprehensive view of your financial status.

The main benefits of this approach are:

• Multidimensional and real-time cash flow analysis
• Detailed cash flow information according to your requirements
• Additional filters for more information
• Consistent data flow

The cash flow report uses semantic tags allocated to relevant items of the financial statement or general ledger (G/L) accounts for data sourcing or determination. This calculation methodology is built around the Core Data Services (CDS) view C_CashFlowIndirectIFRS, ensuring accuracy and reliability in financial analysis and statement management.