Final answer:
U.S. GAAP requires a statement of cash flows to be presented for each period that an income statement is provided. It shows cash inflows and outflows from operating, investing, and financing activities, aiding in assessing a company's liquidity and financial health.
Step-by-step explanation:
The student's question relates to financial accounting standards under the United States Generally Accepted Accounting Principles (U.S. GAAP). Specifically, the query is about the reporting requirements for the statement of cash flows.
Under U.S. GAAP, a statement of cash flows must be presented for each period for which results of operations are presented. In simpler terms, this means that for every income statement reported, a corresponding statement of cash flows must also be provided. This requirement is outlined in the Accounting Standards Codification (ASC) and ensures that financial statement users can see the cash inflows and outflows of the reporting entity during a specific period, typically a fiscal year or quarter.
The statement of cash flows is divided into three main sections: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. By analyzing the statement of cash flows, investors, creditors, and other stakeholders can assess the company's liquidity, solvency, and financial flexibility.