Global Journal of Management and Business Research, C: Finance, Volume 22 Issue 5

c) It participates in the process of developing the international accounting standards adopted in Europe, maintaining relations with the International Accounting Standards Board (IASB), the European Financial Reporting Advisory Group (EFRAG) and the accounting bodies of other countries. Concerning the activities under a), b), and c), it coordinates with the national authorities competent in accounting matters. 2. In exercising its functions, the IAO (Italian accounting organism (henceforth IAO, in the Italian language OIC) pursues public interest purposes, acts independently and adapts its statute to the canons of efficiency and economy. It reports annually on its activities to the Ministry of Economy and Finance. From what is stated in this Article, it can be understood how the Italian civil code's almost blank reference to the IC principle is perfectly legal insofar as it is provided for in Article 9a above. Therefore, to understand what the Italian Civil Code imposes concerning the content of the cash flow statement, which, as we recall, represents the fourth document constituting financial reporting for the financial year together with the balance sheet, profit and loss and the notes to the financial statements, it is necessary to refer exclusively to principle number 10 cash flow statement issued by the IAO (Italian accounting organism, henceforth IAO, in Italian language OIC). Before addressing this issue, it is necessary to recall that among all the nations adhering to the IASB, the body that issues the IAS/IFRS standards, the ultimate goal is to align their national legislation and accounting standards, as much as possible with the standards issued by the international body and therefore with the IAS and IFRS standards. As will be noted, the content of the Italian national accounting Italian Accountin Organism OIC number 10 cash flow statement reproduces, albeit with some slight modifications, what is reported in the international standard IAS 7. The IAO (in italian language OIC)) principle 10 cash flow statement requires that flows, precisely as in IAS 7, must be aggregated into operating activities, investing activities and finally, financing activities. The standard specifies that 'Operating activities generally include transactions related to the acquisition, production and distribution of goods and the provision of services, even if related to incidental operations, as well as other transactions not included in investing and financing activities. Investing activities include purchasing and selling property, plant and equipment, intangible and financial assets and financial assets not held as fixed assets. Financing activities include transactions to obtain and return cash in the form of risk capital or debt capital." Concerning the definition and content of the aggregate of operating activities investing activities, and financing activities, it can be seen that there is a substantial similarity with what is reported in IAS 7. Principle IAO (italian accounting organism, in italian language OIC) n. 10 states that: "Operating activities Cash flows from operating activities generally include cash flows arising from the acquisition, production and distribution of goods and the provision of services, even if they relate to incidental operations, and other flows not included in investing and financing activities. Some examples of cash flows generated or absorbed by operating activities are cash receipts from the sale of products and the provision of services; 6 receipts from royalties, commissions, fees, insurance reimbursements and other revenues; payments for the purchase of raw materials, semi-finished goods, merchandise and other inputs; payments for the acquisition of services; payments to, and on behalf of, employees; tax payments and reimbursements; and cash receipts for financial income. Operating activities consist of transactions that result in revenues and costs necessary to produce those revenues. The operations of operating activities are reflected in the profit and loss and represent the sources of financing for the company, particularly self- financing. From them, the liquidity needed to finance future operations is generated. Cash flow from operating activities is determined using the indirect method, whereby profit (or loss) for the year, or profit (or loss) before tax, is adjusted for elements of a non-monetary nature, i.e. accounting items that did not require disbursement/collection of cash during the financial year and that did not have a counterpart in net working capital; some examples are depreciation of fixed assets, provisions for risks and charges, provisions for severance pay, write-downs for impairment losses; undistributed profits related to investments in associated companies valued using the equity method; changes in net working capital related to costs or revenues of operating activities. Some examples are changes in inventories, changes in trade receivables and trade payables, and changes in accrued income and prepaid expenses. Changes in net working capital represent deviations from the previous year's balances, transactions whose effects are included inflows from investing and financing activities. For example, gains or losses from the disposal of assets. These adjustments transform positive and negative income components into cash receipts and payments (i.e. changes in cash and cash. 18 Global Journal of Management and Business Research Volume XXII Issue V Version I Year 2022 ( ) C © 2022 Global Journals Does the Formal Structure of the Cash Flow Statement have an Impact on the Understanding of the Data Contained in the Report Explaining the Company's Financial Dynamics?