I'm Looking at a company who uses the direct method to get to CFO. Cash Receipts from customers is $7bn but revenue as recorded on the IS is $6bn. Receivables only fell by c.200m so I'm not sure where the rest of this $800m is coming from. Any ideas?
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Unearned revenue
It's not unearned revenue either because that would be on the BS...
Unearned revenue would be a liability, and it works the same way accounts payable does. An increase in unearned revenue does not affect net income or s/h equity, but it does increase cash since payment has been received for a future good or service. Would be my best guess anyway.
It's not unearned revenue.
The annual report for the company can be found here: http://www.arrium.com/~/media/Files/ASX%20Announcements/FY2014/Annual%2…
Edit - Didnt read OP properly
Discontinued operations.
Thanks
Until someone asks where the other $40m is and you can't answer...
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