The Direct Method Cash Flow Statement is not classifying items correctly. See screenshots below of comparison between direct method and indirect method. The direct method statement is reporting all amounts under Operating Activities when some of it should be reported as Investing activities. It is possible to get the Direct Method to report correctly if I record the transaction as a payment only (not as Purchase invoice then payment). Is there something that I am not doing correctly?
Could you create simple test case demonstrating the issue?
Pretty sure Cash flows from (used in) operating activities should be the same figure under both direct & indirect method.
What sort of transaction is Construction in Progress ? Is it an invoice?
In your simple test case, just focus on a single transaction that is causing this. That way we can easier reason how to handle it.
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Yes, Purchase invoice to Balance sheet account under assets named Construction in Progress and designated as Investing activities. Then payment made against the invoice from bank account.
Tested using fixed asset account and still have same issue.
As mentioned in original post if I don’t enter an invoice but only payment it reports correctly.
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OK. The total for operating activities (and thus totals for all activities) must be the same for both methods.
I will need to fix the implementation of Direct method. I consider Indirect method to be the correct one.
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It turns out both direct and indirect method had its own set of issues.
The latest version (24.8.2) is fixing cash flow statement so the calculation is consistent between direct and indirect method.
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@lubos, I think that with this change some significant problems have arisen, resulting in a report bug.
I noticed discrepancies between the cash outflows recorded in the Reports and those in the financial statements (the Cash Flow Statement Direct Method now shows different figures compared to previous years).
Specifically, while the Net increase (decrease) in cash held and Cash at the end of the period are correct, some cash outflows are incorrectly linked to liabilities (though drill down I noticed that (some?) purchase invoices to be recorded for the cash outflow) rather than the respective payments (as in the previous versions), resulting in wrong cash flow groups.
It’s challenging to illustrate this issue immediately (but I will do so if you cannot find the issue), so please review this change or revert to the previous version (before this update).
Cloud - 24.8.2.1782
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@evans this would really require isolating the issue into some kind of test file so we can examine it.
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