Is there any example that Cash flow may be affected by exclusion of off-balance sheet obligation(A)? ---------- Which of the following statements regarding problems that are commonly encountered in the analysis of a firms financial reports is FALSE? A) Cash flows may be affected by the exclusion of off-balance sheet obligations. B) Some assets and liabilities are not recorded, and the book values of assets and liabilities may differ significantly from their market values. C) Income statement items that may require adjustment include accounting changes, one-time charges and restructuring charges. D) Adjustments to the income statement that may not be recorded include operating leases, take-or-pay contracts and environmental obligations. Your answer: D was correct! Adjustments to the balance sheet, (not income statement) that may not be recorded include operating leases, take-or-pay contracts and environmental obligations.
LIFO reserve is an off-balance sheet asset, and lifo liquidations have the effect of a decrease in cash flow due to the taxes paid on the paper profits. Can’t think of any liabilities at the moment.
What about the effect on CFF from a capital lease. The part the principal repayment should be CFF right?