Lee’s Model vs. Lawson’s Model
There are some basic differences in the Lee and Lawson proposal for formulation of Cash Flow Model. Firstly, Lee conceived the structure of cash flow accounting as an inter-locking series of statements for a variety of users. Lawson, on the other hand, is mainly concerned with the provision of cash flow data to improve the information base of investors and financial managers.
Secondly, Lee’s system is enterprise oriented, intended for a variety of user group, and concentrates on a reporting of the various cash flow of the entity; Lawson’s system is largely proprietorial in nature because of its attention to distributable flows and investors.
William Ferrara has devised a system of financial reporting on cash …show more content…
Lee and Lawson have been prominent among European advocates of cash flow accounting. At present, this system is associated with these two scholars. They have given sophistication to cash flow accounting and argued forcefully for its introduction. Lee argued that cash flow accounting data are useful to most external users or groups interested in companies especially to bankers and lenders concerned with assessing corporate liquidity.
Cash flow accounting data do not appear to cause difficulties to its investors-users despite their lack of familiarity with it. Lee finds that most of the companies in U. K. used cash flow accounting system to a considerable extent for internal management purposes. The utility of cash flow accounting in the area of taxation has been recognized in the report of U. K.’s Meade Committee (1978) in which it has been recommended that company tax in the U. K. be based on measured cash flow. 10 This is the first tangible evidence of its practical utility and
There are some basic differences in the Lee and Lawson proposal for formulation of Cash Flow Model. Firstly, Lee conceived the structure of cash flow accounting as an inter-locking series of statements for a variety of users. Lawson, on the other hand, is mainly concerned with the provision of cash flow data to improve the information base of investors and financial managers.
Secondly, Lee’s system is enterprise oriented, intended for a variety of user group, and concentrates on a reporting of the various cash flow of the entity; Lawson’s system is largely proprietorial in nature because of its attention to distributable flows and investors.
William Ferrara has devised a system of financial reporting on cash …show more content…
Lee and Lawson have been prominent among European advocates of cash flow accounting. At present, this system is associated with these two scholars. They have given sophistication to cash flow accounting and argued forcefully for its introduction. Lee argued that cash flow accounting data are useful to most external users or groups interested in companies especially to bankers and lenders concerned with assessing corporate liquidity.
Cash flow accounting data do not appear to cause difficulties to its investors-users despite their lack of familiarity with it. Lee finds that most of the companies in U. K. used cash flow accounting system to a considerable extent for internal management purposes. The utility of cash flow accounting in the area of taxation has been recognized in the report of U. K.’s Meade Committee (1978) in which it has been recommended that company tax in the U. K. be based on measured cash flow. 10 This is the first tangible evidence of its practical utility and