Studying information content of operating cash flow in disclosure method Hoseinimasoom Nedaa, Hoseinimasoom Mohammadrezab, Inabrohg Mohammadb aYoung Researchers and Elite Club, Firoozkuh Branch, Islamic Azad University, Firoozkuh, Iran bDepartment of Accounting, Bojnourd Branch, Islamic Azad University, Bojnourd, Iran *Corresponding Author: E-mail: hoseinimr@yahoo.com
Online published on 7 January, 2015. Abstract Disclosure of operating cash flow in different ways (direct and indirect ways), there has always been a contradiction between the standard policy makers and academic literature on the one hand and the practice of the accounting profession on the other hand. Iran's Accounting Standard No. 2, consistent with SFAS 95 in the U.S., IAS 7 in sets of international accounting standards and standard of FRS 1 in the UK, considers direct way disclosure of operating cash flow the most useful method. However, the accounting profession and in practice, the indirect method is the predominant method. In this study, we tried to compare the informative content of both disclosure of cash flow method using data for 14 member companies in Tehran Stock Exchange (the period of 1998 till 2011). Hypothesis test results showed that in general the direct method can better predict future operating cash flow. However, the indirect method of regression model in firms that have low debts have a better predictive power, On the other hand, companies with high organizational complexity, companies with a high return on assets and also companies with increased liabilities, the information content of both direct and indirect regression Top Keywords Operating cash flow, Direct Method, Indirect Method, Organizational complexity, Debt Amount, Return on assets. Top |