The Usefulness of Direct and Indirect Cash Flow Disclosures

44 Pages Posted: 2 Feb 2001 Last revised: 25 Dec 2010

See all articles by Greg Clinch

Greg Clinch

Macquarie Business School

Baljit K. Sidhu

UNSW Australia Business School, School of Accounting

Samantha Sin

Macquarie University - Faculty of Business and Economics

Date Written: November 1, 2000

Abstract

We investigate the ability of disclosed operating cash flow and indirect accruals components to explain annual returns for a sample of Australian firms. Consistent with claims made by accounting standard setters, we find evidence of significant explanatory power for disclosed operating cash flow components beyond aggregate operating cash flows when they also have significant incremental predictive power for future (one year ahead) operating cash flows. Accrual components also have incremental explanatory power for returns. In addition, we find evidence of significant explanatory power for operating cash flow components beyond estimates of the components (based on other financial statement disclosures) for firms with large differences between disclosed and estimated components.

JEL Classification: G14, M41, M44

Suggested Citation

Clinch, Greg and Sidhu, Baljit K. and Sin, Samantha, The Usefulness of Direct and Indirect Cash Flow Disclosures (November 1, 2000). Review of Accounting Studies, Vol. 7, No. 4, 2002, Available at SSRN: https://ssrn.com/abstract=251957 or http://dx.doi.org/10.2139/ssrn.251957

Greg Clinch (Contact Author)

Macquarie Business School ( email )

Eastern Rd.
North Ryde
Sydney, NSW 2109
United States

Baljit K. Sidhu

UNSW Australia Business School, School of Accounting ( email )

Sydney, NSW 2052
Australia

Samantha Sin

Macquarie University - Faculty of Business and Economics

Sydney, New South Wales 2109
Australia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,213
Abstract Views
7,006
rank
20,203
PlumX Metrics