Taking the Mystery Out of the Cash Flow Statement : A Simplified Implementation of the Indirect Method

A drawback of the indirect method of presenting the statement of cash flows is that it requires knowledge of a myriad of special adjustments to income. Compounding the problem, current descriptions of the method are incomplete, confusing and often incorrect. I propose a simplified implementation of the indirect method that is applicable to any set of transactions, under any accounting environment, and can be written as a computer program. In order to demonstrate this implementation, I have used data from Amazon.com's 2002 annual report to shareholders