What is the diference between direct cash flow statement and indirect cash flow statement?

 The direct method deducts from cash recipts all cash disbursements which bring it to a condensed cas recipts and cash disbursement statement. The indirect method however, adjust net income for things that affected net income but not cash. In order to find net cash flow from operating activities, noncash changes are added back to net income, and net cash credits are deducted.

he main difference between the direct method and the indirect method involves the cash flows from operating activities, the first section of the statement of cash flows. (There is no difference in the cash flows reported in the investing and financing activities sections.)Under the direct method, the cash flows from operating activities will include the amounts for lines such as cash from customers and cash paid to suppliers. In contrast, the indirect method will show net income followed by the adjustments needed to convert the total net income to the cash amount from operating activities.The direct method must also provide a reconciliation of net income to the cash provided by operating activities. (This is done automatically under the indirect method.)Nearly all corporations prepare the statement of cash flows using the indirect method