According to SFAC No. 1, financial statements should provideinformation that is useful for investors’ decision making.Paragraph 37 of SFAC No. 1 states that financial reporting shouldprovide information to help users access the amounts, timing anduncertainty of prospective cash flows. Paragraph 43 of SFAC No. 1states that the primary focus of financial reporting is providinginformation about an enterprise’s performance based on measures ofearnings and earnings components.
Present arguments that the income statement, not the statementof cash flow, is the most important financial statement toprospective investors.
