Currently, U.S. GAAP allows entities to present their operating cash flows either under the direct or the

Question:

Currently, U.S. allows entities to present their operating cash flows either under the direct or the indirect method.
1. Briefly describe each method’s approach.
2. What is the primary advantage of each method?
3. Discuss which participants in the financial reporting process preferred each of the methods and why.
4. Why did the Board decide to allow either method?
GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...