Use this screen to edit existing or create new account types for cash flow accounts. These types will be linked to statement of cash flow rows in the Set Up Financial Statements screen. The cash flows account types will determine whether transactions are treated as a source or as a use of cash. You can also use this screen to set up the source and use descriptions. A unique cash flows account type will be needed for each line on the statement of cash flows.
In this screen, you will assign a calculation method to each account type. The calculation methods are system-defined. For example, you could assign a calculation method of "CHNG" (change) for the account type "AR" (Accounts Receivable). This method will calculate the change that occurred in the account balance from one period to another.
There are system-supplied codes to identify sources and uses of cash, but you may need to add your own codes for any unique transactions that affect cash. The row containing the "N/A" (Not Applicable) Account Type Code is used for financial statement lines that do not require analysis for cash flow purposes. This line is not editable.
Review this screen before beginning work on your Statement of Cash Flows. Adjust or add account types codes based on the types of transactions that your company makes. Before using this screen, you should have a comprehensive plan regarding which cash flow accounts will appear on your financial statements.
The account type codes that are system-supplied will cover most cash flow needs. Use the New Line button on the toolbar to create any additional codes. You can use these codes to link similar types of financial statement lines for reporting within the Statement of Cash Flows only. The "N/A" Account Type Code will never be included in any calculation of cash flows.
Enter a description of the account type code to identify the cash flow transactions that will be linked to this line. You can edit this field to better identify your company's cash flow transactions.
Use the drop-down box to select the type of calculation that should be performed for the account type. These codes cannot be edited.
The selection here is critical to the successful completion of your Cash Flows Statement. For accounts such as A/P and A/R, most companies will use "Diff in Beg. & Ending Balance" (CHNG) as the calculation method and "Sum all account debit amounts" (DBT) for their long-term assets. You must review these calculation methods carefully for correct preparation of the Statement of Cash Flows.
This displays the calculation method code based on the Calculation Method Description selected for this row. You cannot edit this field.
The following are some common calculation methods:
BAL (Account Balance) - The entire balance in the account will be shown on the statement. The amounts will be taken from the FS_SUM table. The BEG_AMT and the PD_X_AMTs will be summarized up to and including the period entered in the Create Preliminary Cash Flows Statement screen. You can use this type of calculation method for net income adjustments such as depreciation or amortization.
CHNG (Difference in Beginning and Ending Balance) - The activity in the account will be summarized and displayed on the statement. The system will calculate this amount by subtracting the sum of the PD_X_AMTs in the FS_SUM table (up to and including the period entered in the Create Preliminary Cash Flows Statement screen) from the BEG_AMT in the FS_SUM table. You can use this calculation method for analysis of current assets and liabilities.
DRCR (Sum Debits/Credits separately) - This method will separately summarize the debits and credits in the GL_POST_SUM table. (The debit and credit amounts will be shown separately on the cash flows statement.) You can use this method for payments and draws on a line of credit.
SALE (Sale of Assets) - This calculation method is specifically designed for the sale of assets. When this method is assigned, the activity type in the Set Up Financial Statements screen will become non-editable. This method will first take the entire balance in the account and show it in the operating section. It will then look for amounts in the GL_POST_SUM table that have a "CR" (Cash receipts) designation in the S_JNL_CD column. These amounts will be shown in the investing section as "Proceeds from sale of assets."
CASH (Cash and Cash Equivalents) - This calculation method will be used for the Cash and Cash Equivalent lines/accounts. Any cash flows account type that uses "CASH" as its account type will not print in the main section of the report. Lines or accounts that use this calculation method will print at the bottom of the statement as Beginning and Ending Cash and Cash Equivalents. The Create Preliminary Cash Flows Statement screen will ignore lines/accounts with this calculation method. The Create Preliminary Cash Flows Statement screen will create the tables necessary to print a cash flows statement. The calculation method description and activity type in the Set Up Financial Statements screen will automatically be set to "Not Applicable."
CR (Cash Receipts Only) - Only amounts that have a "CR" (Cash Receipts) in the S_JNL_CD column in the GL_POST_SUM table will be evaluated. All GL_POST_SUM_AMTs will be totaled up to and including the period entered in the Create Preliminary Cash Flows Statement screen. This method of calculation would be assigned to an account that is required to display only the "Cash Receipts" information for inclusion on the statement of cash flows.
DBT (Sum All Debit Amounts) - The system will use the GL_POST_SUM table to calculate these amounts. You can use this code for analysis of fixed asset accounts or any other asset account. A fixed assets type of account can use this calculation method to record all fixed asset purchases. In order to perform the calculation, all the debits to the accounts should be summed to arrive at the amount to be displayed on the report. Amounts derived from this calculation method will be classified as a use of funds.
CD (Cash Disbursements Only) - This code is designed for cash disbursements. It is mainly used with long-term asset and liability accounts. This calculation method evaluates any debits to the accounts payable account with a S_JNL_CD of "APV" or "PO." This calculation method summarizes all the amounts with these S_JNL_CDs. Amounts derived from this calculation method will be classified as a use of funds.
CRDT (Sum All Credit Amounts) - This calculation method evaluates only credits to the accounts. The GL_POST_SUM table is used to derive the amounts. All credits to the account will be summed to arrive at the amount to be displayed on the report.
This code tells the system whether the source or use description should be used.
Enter an "S" when positive amounts are sources of cash. Enter a "U" for positive amounts that are uses of cash. Changing these codes will cause the selected cash flow amounts to "flip" signs (+/-). The "N/A" Account Type Code will never be included in any calculation of cash flows.
In order to evaluate the proper setting for this code, you should assess the outcome of the calculation. Using the calculation method assigned to this account type, determine whether a positive result is a source or use of cash.
Enter up to 30 alphanumeric characters as the description to display when the row amount is a source. Use this description when the outcome of the calculation is a source of cash.
Enter up to 30 alphanumeric characters as the description to display when the row amount is a use. Use this description when the outcome of the calculation is a use of cash.
Select this checkbox to include the description of the financial statement line along with the source or use description. You can select this checkbox only when a description exists in both the Source Description and Use Description fields.