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Difference between estimated and reported net operating cash flows as a measure of nonarticulation (DIFF)
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A Research Note On The Issue Of Non-Articulation And The Method Used To Calculate Net Operating Cash Flow, Terry J. Ward, Jon Woodruff, Benjamin P. Foster
A Research Note On The Issue Of Non-Articulation And The Method Used To Calculate Net Operating Cash Flow, Terry J. Ward, Jon Woodruff, Benjamin P. Foster
Faculty Scholarship
Using a proxy for nonarticulation, prior researchers found evidence that many companies using the indirect method of reporting net cash flow from operations have a significant level of nonarticulation. The purpose of this study is to determine if companies using the direct method of reporting net cash flow from operations experience significantly lower levels of nonarticulation than companies that use the indirect method of reporting net cash flow from operations. Results show that companies using the direct method have significantly less nonarticulation than companies using the indirect method. This finding suggests that the Financial Accounting Standards Board (FASB) should consider …