Academic literature on the topic 'Funds-flow statements'
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Journal articles on the topic "Funds-flow statements"
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Boussard, Daniel, and Bernard Colasse. "Funds-flow statements and cash-flow accounting in France." European Accounting Review 1, no. 2 (December 1992): 229–54. http://dx.doi.org/10.1080/09638189200000022.
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Hasibuan, Henny Triyana. "Statement of Financial Accounting Standard (PSAK) No. 109 and Its Implementation in Several Zakat Management Organizations in Malang, East Java." Shirkah: Journal of Economics and Business 1, no. 3 (December 30, 2016): 339. http://dx.doi.org/10.22515/shirkah.v1i3.89.
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Abstract Indonesian Accountant Association (IAI) has issued the statement of financial accounting standards No. 109 (PSAK No. 109) regarding zakat, infaq, sadaqah (ZIS). This research was conducted on several Zakat Management Organization (OPZ) in Malang, East Java. This research aims to analyze the consistency of the PSAK application in some OPZ in Malang in accordance with Statement of Financial Accounting Standards (PSAK) No. 109. As a result, this research finds that some OPZ in Malang do not prepare financial statements in accordance with PSAK 109. The financial statements of the OPZ is reported only in the form of income statements and distribution funds, while excluding such statements as financial position, changes in funds, changes in assets, cash flow and remarks to the financial statements. This research give a salient contribution of analyzing the implementation of zakat, infaq and sadaqah in Indonesia. KeywordsPSAK No.109, Indonesian Accountant Association (IAI), zakat, infaq, sadaqah
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Baihaqi, Jadzil. "Diskursus Akuntansi Zakat: Evaluasi Praktis Laporan Keuangan Lazisnu Kabupaten Kudus." AKTSAR: Jurnal Akuntansi Syariah 1, no. 1 (November 27, 2018): 1. http://dx.doi.org/10.21043/aktsar.v1i1.3721.
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<p class="bdabstract">This research aims to identify and explain application about the implementation of PSAK 109 Zakat Accounting to financial reports of Zakat Management. The method used is a case study of LAZISNU Kudus by analyzing the 2017 financial statements and by interviewing the manager. This study finds that, in general, financial reports of LAZISNU Kudus are not in accordance with PSAK 109 because there are two incompatibilities. F<span lang="EN">irst, there are only two elements of the five elements in the financial statements, that are the Statement of Changes in Fund and the Statement of Cash Flow. Secondly, Amil funds are not properly recognized and presented, because they were not separated from zakat funds and infaq/shadaqah funds.</span></p>
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Sinaga, Liskauli, Zainal Abidin, and Rosmaini Rosmaini. "Peranan Audit Operasional dalam Pemeriksaan Sumber dan Penggunaan Dana pada PT. BPR Eka Prasetya Medan." Economics, Business and Management Science Journal 3, no. 1 (February 28, 2023): 13–19. http://dx.doi.org/10.34007/ebmsj.v3i1.339.
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xThe purpose of this study was to determine the role of operational audit in examining sources and uses of funds at BPR Eka Prasetya Medan. The formulation of the problem in this study is "What is the role of the operational audit in examining the sources and use of funds at BPR Eka Prasetya"?. Auditing is "An examination that is carried out critically and systematically by an independent party, on the financial statements that have been prepared by management along with the accounting records and supporting evidence, with the aim of being able to provide an opinion regarding the fairness of the financial statements". BPR Eka Prasetya Medan, prepares a cash flow statement using the indirect method, in which this method reports cash flows prepared based on cash/bank. The method of preparing the statement of cash flows is indirectly prepared based on the income statement and balance sheet. changes in cash inflows (inflows) and cash outflows (outflows) as presented in cash flows in operating activities are as follows, in 2011 the value of Rp. 894,055,200, - while in 2012 it was Rp. 610,441,800,-. Changes in operating cash flow can be seen from 2011 to 2012 of (Rp. 283,610,400) the company's operating cash flow experienced a decrease or was negative. After doing a comparison between theory and practice regarding the role of operational audit in the source and use of funds on cash flow as a tool in increasing the effectiveness and efficiency of the company. This can also be seen from the procedures carried out by BPR Eka Prasetya in avoiding misappropriation of incoming and outgoing cash.
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KOZMENKOVA, Svetlana V., and Guzaliya S. KLYCHOVA. "An economic expert analysis of funds in the context of digitalization: Some considerations." Digest Finance 28, no. 3 (September 28, 2023): 255–70. http://dx.doi.org/10.24891/df.28.3.255.
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Subject. This article discusses the issues of organization and methodology of forensic economic examination of cash transactions on bank accounts of an economic entity in the context of digitalization. Objectives. The article aims to investigate the organization and methodology of the availability and flow of funds in the context of digitalization of the economy, taking into account the presence of three symbolic types of money: paper, credit, and the digital ruble. Methods. For the study, we used analysis and synthesis, systematization, and generalization. Results. The article defines the tasks, objects and subject of economic expert analysis of funds in the context of digitalization, and it also presents a procedure for conducting economic expert analysis of funds. It also identifies the need to use due diligence and a comprehensive examination, including economic and computer-technical expertise, in most studies of the availability and flow of funds. Conclusions and Relevance. Forensic economic examination of funds has some specifics and features of the organization and methodology, concerning source documents, registers and financial statements, as well as a balance sheet, cash flow statements, and explanations to the financial statements. The results of the study can be applied in the theory and practice of financial accounting and reporting.
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Nazhifah, Naurah, Iwan Wisandani, and Lina Marlina. "ANALISIS IMPLEMENTASI PSAK 101 PADA LAPORAN KEUANGAN DI KSPPS BMT AL-BINA TASIKMALAYA." JURNAL EKONOMI SYARIAH 5, no. 1 (July 1, 2020): 42–58. http://dx.doi.org/10.37058/jes.v5i1.1577.
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This research, to study the implementation of PSAK 101 on the presentation and preparation of financial statements in KSPPS BMT Al-Bina Tasikmalaya. That is because at the BMT Al-Bina's financial statements found a non-conformity with PSAK 101 on the presentation of sharia financial statements. PSAK 101 is a statement of financial accounting standards that regulates the basic presentation of financial statement for sharia entities. This statement regulates the requirements for the presentation, structure and minimum requirements of the contents of financial statements. The method that used in this study is a qualitative descriptive method. Data collection technique in this research uses interviews, observation, and documentation to analyze data from the practice that carried out directly at the research site. The results of the study show that BMT Al-Bina in presenting they financial statements has not fully applied PSAK No.101, because (1) does not present a statement of cash flow, (2) does not present statement of sources and distribution of zakat (3) does not present statement of source and the use of virtue funds (4) does not present notes to financial statements (5) does not provide financial reporting and financial reporting information as required by PSAK No.101.
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Siregar, Abdul Hakim, Ikhwanuddin Harahap, and Delima Sari Lubis. "Analisis Implementasi Pernyataan Standar Akuntansi Keuangan 109." Journal of Islamic Social Finance Management 1, no. 1 (May 7, 2021): 1–16. http://dx.doi.org/10.24952/jisfim.v1i1.3529.
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AbstractCash receipts from zakat and infaq funds will increase zakat and infaq / alms funds, and the distribution of zakat funds will reduce the cash of zakat and infaq funds, which is called the double entry recording system, while the recording carried out by BAZNAS Tapanuli Selatan only applies the method single entry, the recording system is indeed simple and easy to understand, but it cannot produce complete financial reports, it is difficult to find errors that occur and difficult to control. BAZNAS Tapanuli Selatan has not fully implemented PSAK 109 in South Tapanuli BAZNAS. BAZNAS Tapanuli Selatan has implemented part of PSAK 109 in the financial statements and the information required in PSAK 109 in BAZNAS's financial statements can be found but there are still a series of BAZNAS financial reports that have not been owned based on the PSAK reference, namely Cash Flow Statements and Notes to Financial Statements. Keyword : Zakah, PSAK 109, BAZNAS
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Harianto, Syawal, Nurul Mawaddah, Anhar Firdaus, Abdul Halim, and Silvia Lestari. "Implementasi Akuntansi Zakat Infak/Sedekah Berdasarkan PSAK No. 109 pada Baitul Mal Kabupaten Bener Meriah." AKTSAR: Jurnal Akuntansi Syariah 5, no. 1 (June 28, 2022): 15. http://dx.doi.org/10.21043/aktsar.v5i1.13032.
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<span lang="EN-US">This study aims to determine whether the financial statements presented by Baitul Mal Bener Meriah Regency are under PSAK No. 109, as well as dig up information on the implementation constraints of PSAK No. 109. This study uses a qualitative approach with a descriptive method. The data of this research are primary and secondary data. Primary data results from interviewing personnel from the finance department and treasurer. At the same time, secondary data is in the form of documentation of financial statements of Baitul Mal, Bener Meriah Regency in 2020. The results show that Baitul Mal Bener Meriah Regency in presenting financial reports is not entirely under PSAK No. 109. Baitul Mal Bener Meriah Regency only offers a statement of financial position, a report on changes in funds, and a cash flow report. In addition, Amil funds are not presented separately from zakat and donation funds. This limitation is because Baitul Mal Bener Meriah Regency Human Resources do not become skillful in PSAK No. 109.</span>
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Arbatskaya, Tatyana G. "Accounting and Analysis of Cash Flows of Penal Entities." Financial Journal 13, no. 1 (February 2021): 107–24. http://dx.doi.org/10.31107/2075-1990-2021-1-107-124.
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The global economic crisis, exacerbated by the pandemic of the new coronavirus infection, has led to a significant deterioration in the financial state of most economic entities. This problem has also affected public sector entities receiving budget financing. Even if a given public sector entity is engaged in entrepreneurial activity, with a decrease in sales cash flow decreases, whereas accounts receivable and payable increase. To carry out their statutory activities, state entities of the penitentiary system in the Russian Federation use not only budgetary funds, but also funds received from the sale of products manufactured by convicts. Therefore, the interest of users in the cash flows of penitentiary institutions is steadily increasing. The above strengthens the information and analytical functions of cash flow statements. Unlike other forms of reporting, the cash flow statement should report cash flows during the period classified by operating and investing activities (financing activity is not typical for penitentiary entities). In addition, the statement of cash flows provides useful information not only for controlling the use of budget funds, but also for current and forecast analysis. The article investigates the theoretical principles of accounting of cash flows of public sector entities of the penitentiary system of the Russian Federation. Results of the study include a proposal to improve the form of the cash flow statement by including an analytical feature — the source of financing activities. The study also presents and tests a methodology for analyzing cash flows in the context of funding sources.
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Dwikasmanto, Yunus. "ANALISIS PENYAJIAN LAPORAN KEUANGAN BERDASARKAN SAK-ETAP PADA KPN SERUMPUN DINAS PENDIDIKAN DAN KEBUDAYAAN KABUPATEN REJANG LEBONG." Jurnal Ilmiah Raflesia Akuntansi 7, no. 2 (October 30, 2021): 54–62. http://dx.doi.org/10.53494/jira.v7i2.98.
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Financial statements are a means of communicating financial information from the results of the accounting activity process that can assist users of financial statements in making decisions. Generally accepted Financial Accounting Standards are considered complicated to apply to business entities that do not have public accountability. Based on this, IAI issued Financial Accounting Standards for Entities Without Public Accountability (SAK-ETAP) which can accommodate accounting needs for entities that do not have public accountability. This study aims to analyze the application of SAK-ETAP in the presentation of the financial statements of the Cognate KPN of the Education and Culture Office of Rejang Lebong Regency. KPN Cognate of the Education and Culture Office of Rejang Lebong Regency is a business entity that manages members' funds in the form of savings and loans. The method used in this research is comparative descriptive analysis. The results of the study based on the presentation of the balance sheet, income statement, statement of changes in equity, and cash flow statements for 2019, show that the KPN Cognate of the Education and Culture Office of Rejang Lebong Regency has not presented notes on financial statements (CALK), there is an error in the classification of account posts, and there are inconsistencies in updating the statement of cash flows. This study suggests that cooperatives disclose cooperative accounting policies in CALK, update each component of financial statements, and hire employees who are skilled in accounting.
Dissertations / Theses on the topic "Funds-flow statements"
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Scott, Angelique. "Truth in collective investment fund advertising : evidence on future performance and fund flows." Thesis, Stellenbosch : Stellenbosch University, 2004. http://hdl.handle.net/10019.1/50207.
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Thesis (MBA)--Stellenbosch University, 2004.ENGLISH ABSTRACT: In this study project, the performance and fund flows to open-end collective investment schemes available in South Africa that are advertised in the Personal Finance newspaper and Financial Mail magazine, are examined. The sample consists of 34 open-ended unit trust funds from 4 different asset managers. Two main objectives are addressed: the first main objective is to test whether collective investment schemes advertisements are used to signal superior management skills by examining the performance of the funds prior to placing the advertisement and measuring the performance in the post-advertising period. The second main objective is to test whether advertising is used to attract more fund flows to the funds. The results indicate that the fund managers advertised their funds at a time when the funds were under-performing, showing no significant superior performance. In the one-year period following the advertisement their performance was marginally better than the bench marked performance. The results indicate that superior fund management skills exist and that timing of the placement of the advertisement is important. The fund flow analysis shows that advertised funds attract significantly more money in comparison to the funds in a control group with similar characteristics. Once again the results could be attributed to superior fund management skills or the timing of the marketing department.
AFRIKAANSE OPSOMMING: In hierdie studieprojek word die prestasie en fondsvloei van kollektiewe beleggingskemas wat in Suid-Afrika beskikbaar is en in Personal Finance koerant en Financial Mail tydskrif geadverteer word, ondersoek. Die steekproef bestaan uit 34 kollektiewe beleggingsfondse van vier verskillende batebestuurders. Twee hoofdoelwitte word bespreek: die eerste hoofdoelwit is om te toets of kollektiewe beleggingsfondse advertensies gebruik om superieure bestuursvaardighede aan te dui, deur die prestasie van die fonds voor die advertensieplasing en die prestasie in die post-advertensie periode te ondersoek. Die tweede hoofdoelwit is om te toets of advertensies gebruik word om fonds invloeie na die fonds aan te trek. Die resultate dui aan dat die fondsbestuurders hul fondse adverteer op 'n tydstip wanneer die fonds onderpresteer, wat nie enige betekenisvolle superieure prestasie voorstel nie. In die een-jaar periode na die advertensieplasing, was hul prestasie marginaal beter as die verwysingspunt (standaard) prestasie. Die resultate dui aan dat superieure bestuursvaardighede wel bestaan en dat die tydsberekening van die advertensieplasing belangrik is. Die fondsvloei analise wys dat geadverteerde fondse betekenisvol meer geld inbring in vergelyking met die fondse in 'n kontrole groep met gelyksoortige karaktertrekke. Weereens kan die resultate toegeskryf word aan superieure bestuursvaardighede of die tydsberekening van die plasing van die advertensie.
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Donleavy, Gabriel Douglas. "The usefulness of funds flow statements : an empirical study of Hong Kong banks' loan officers' use of published company accounts." Thesis, University of Glasgow, 1991. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.281973.
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Kirchner, J. H. (Johannes Hendrik) 1946. "Kritiese beskouing van die kontantvloeistaat as element van finansiële verslagdoening." Diss., 1995. http://hdl.handle.net/10500/17094.
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Text in AfrikaansDie primere doelstelling met hierdie studie was om 'n kritiese beskouing van die staat van kontantvloei-inligting (hierna genoem die staat) as element van finansiele verslagdoening te verskaf met die oog op die identifisering van moontlike leemtes, tekortkominge en nut wat die gebruikers van die staat ondervind. Die studie dui daarop dat alhoewel daar 'n aantal leemtes en tekortkominge in die huidige staat is, daar wei 'n behoefte aan die kant van die gebruiker na 'n staat van kontantvloei-inligting as deel van die finansiele state bestaan. Die waarde van sodanige staat is deurgaans in die literatuurstudie sowel as met die empiriese studie beklemtoon. Dit het ook in die studie na vore gekom dat die staat vir gebruikers van groot waarde is in die evaluering van solvensie en risiko in bepaalde ondernemings. Die gebruikswaarde van die staat maak dit dringend noodsaaklik dat daar onverwyld aandag aan die leemtes geskenk moet word. Verskeie aanbevelings vir 'n verbeterde staat van kontantvloei-inligting word dan ook in hierdie studie gemaak en dit sluit 'n moontlike model in. 'n Aantal aanbevelings rondom die praktiese aspekte van die gebruik van die staat word ook gemaak, omdat dit die potensiaal het om 'n onmisbare hulpmiddel vir die gebruiker te word.
The prime objective of this study was to take a critical look at the cash flow information statement (hereinafter named the statement) as an element of financial reporting. It was based on the experience of the users in view of identifying possible gaps, shortcomings and benefits. The study suggests that a definite need occurs from the users side for cash flow information as part of the financial statements. It was also evident from the study that the statement is a very important tool for the evaluation of solvency and risk. The usability of the statement necessitates that attention be given to the gaps. Several recommendations, including a possible model were made for an improvement in the statement. A number of recommendations were also made regarding practical aspects for the use of the statement, since it has the potential to be an indispensable tool for users.
Financial Accounting
M. Com. (Accounting)
Books on the topic "Funds-flow statements"
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Satō, Michimasa. Shikin keisansho kenkyū. Okayama-shi: Okayama Daigaku Keizai Gakubu, 1990.
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Don, Anderson. Free cash flow theory and voluntary disclosures of funds statements. Glasgow: University of Glasgow, School of Financial Studies, 1988.
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Lee, T. A. The funds statement and cash flow reporting. London: Technical and Research Department of the Chartered Association of Certified Accountants, 1990.
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Lee, T. A. The funds statement and cash flow reporting: An empirical observation of funds flow reporting practices: 1970 to 1987; with particular reference to cash flow reporting and takeover accounting and disclosure. London: Technical and Research Department of the Chartered Association of Certified Accountants, 1990.
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Breda, Michael F. Van, and Sloan School of Management. Inflation Adjusted Funds Flow Statements. Creative Media Partners, LLC, 2018.
Find full textBook chapters on the topic "Funds-flow statements"
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Stevens, P., and B. Kriefman. "Funds Flow Statements." In Work Out Accounting A-Level, 188–99. London: Macmillan Education UK, 1991. http://dx.doi.org/10.1007/978-1-349-12640-8_19.
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Stevens, P. "Funds Flow Statements." In Work Out Accounting GCSE, 198–203. London: Macmillan Education UK, 1987. http://dx.doi.org/10.1007/978-1-349-09460-8_24.
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Stevens, P., and B. Kriefman. "Funds Flow Statements." In Work Out Accounting ‘A’ Level, 185–94. London: Macmillan Education UK, 1988. http://dx.doi.org/10.1007/978-1-349-09807-1_19.
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Someya, Kyojiro. "The Use of Funds Statements and Cash Flow Statements in Japan." In Japanese Accounting, 209–19. Oxford University PressOxford, 1996. http://dx.doi.org/10.1093/oso/9780198290452.003.0020.
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Abstract In July of 1959, supported by the Sangyo Keiri Kyokai (The Industrial Management and Accounting Institute), I conducted a survey on the use of funds statements and cash flow statements among major companies in Japan. The results of that survey appeared in Japanese in the Institute’s publication, Sangyo Keiri. Prior to this, Hector R. Anton, in affiliation with the Business Survey Department at the University of Washington, had conducted a survey on the use of funds statements in companies throughout the United States and Canada, with his results appearing in the October 1954 issue of Accounting Review.
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Someya, Kyojiro. "The Use of Funds Statements in Japan." In Japanese Accounting, 159–68. Oxford University PressOxford, 1996. http://dx.doi.org/10.1093/oso/9780198290452.003.0016.
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Abstract In July 1959 we conducted a survey of selected Japanese companies under the sponsorship of the Sangyo Keiri Kyokai (The Industrial Management and Accounting Institute) in an attempt to determine how funds statements are used in this country. A total of 563 companies were chosen for the survey, as shown in Table 16.1, from the 601 incorporated companies whose stocks were listed on the Tokyo Stock Exchange on 1 April 1959. Two companies in liquidation and thirty-six banking and insurance companies were excluded. The survey was conducted by mailing a questionnaire to the companies and later sending interviewers for replies. In designing the questionnaire, we considered it most important to make it structurally comparable to those employed in similar surveys in the United States and Canada. However, Japanese companies were in such peculiar circumstances that cash flow statements had to be treated separately from other funds statements. This necessitates caution in comparing the results with those of similar studies conducted in the United States and Canada.
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Censor, Yair, and Stavros A. Zenios. "Multicommodity Network Flow Problems." In Parallel Optimization, 341–70. Oxford University PressNew York, NY, 1998. http://dx.doi.org/10.1093/oso/9780195100624.003.0012.
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Abstract However, the production and distribution of commodities is entirely unorganized so that everybody must live in fear of being eliminated from the economic cycle, in this way suffering from the want of everything.I trust that posterity will read these statements with a feeling of proud and justified superiority. The movement of some commodity between two points on a network can be represented using network flow models. Such models are prevalent in the real world; and the transportation of products over a railroad system is the prototypical example of a network flow problem. Other examples include the transportation of messages over a telecommunications network, the transmission of electricity over a power distribution grid, the scheduling of water releases through a hydroelectric power generation network of dams and pipelines, the transfer of funds between bank accounts,the exchange of funds among different currencies, and so on. Occasionally, multiple but distinct commodities share the resources of a common underlying network and the resulting models become more complicated. A common example is the movement of traffic along a highway system, where vehicles with different destinations and of different sizes share the same roads.
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Boland, Richard J. "Accounting as a Representational Craft Lessons for Research on Information Systems." In Rethinking Management Information Systems, 229–44. Oxford University PressOxford, 1999. http://dx.doi.org/10.1093/oso/9780198775331.003.0012.
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Abstract In order to deal with the broad topic of how the traditions of research in accounting can provide lessons for our approach to thinking about research in information systems, I have found it necessary to narrow the scope of this study considerably. I will focus on financial and managerial accounting, and will not be touching on other topics of accounting re search, such as taxation or auditing. I have also chosen to avoid accounting research based on agency theory, behavioural decision-making, capital markets, and so-called positive theory. This narrowing still leaves a large domain, and as an organising theme for considering that body of research I will focus on the construction and use of accounting representations such as income statements, balance sheets, funds flow statements, budgets, and cost statements.
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Someya, Kyojiro. "The Development of Funds Flow Accounting." In Japanese Accounting, 187–96. Oxford University PressOxford, 1996. http://dx.doi.org/10.1093/oso/9780198290452.003.0018.
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Abstract Funds flow accounting is the accounting that clarifies the sources from which enterprises raise funds and the purposes to which they apply the funds. As the problems of income accounting are embodied in the income statement, so problems of funds accounting are crystallized in the funds statement. Therefore, the development of funds flow accounting is that of the funds statement.
Reports on the topic "Funds-flow statements"
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Financial Stability Report - Second Semester of 2020. Banco de la República de Colombia, March 2021. http://dx.doi.org/10.32468/rept-estab-fin.sem2.eng-2020.
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The Colombian financial system has not suffered major structural disruptions during these months of deep economic contraction and has continued to carry out its basic functions as usual, thus facilitating the economy's response to extreme conditions. This is the result of the soundness of financial institutions at the beginning of the crisis, which was reflected in high liquidity and capital adequacy indicators as well as in the timely response of various authorities. Banco de la República lowered its policy interest rates 250 points to 1.75%, the lowest level since the creation of the new independent bank in 1991, and provided ample temporary and permanent liquidity in both pesos and foreign currency. The Office of the Financial Superintendent of Colombia, in turn, adopted prudential measures to facilitate changes in the conditions for loans in effect and temporary rules for rating and loan-loss provisions. Finally, the national government expanded the transfers as well as the guaranteed credit programs for the economy. The supply of real credit (i.e. discounting inflation) in the economy is 4% higher today than it was 12 months ago with especially marked growth in the housing (5.6%) and commercial (4.7%) loan portfolios (2.3% in consumer and -0.1% in microloans), but there have been significant changes over time. During the first few months of the quarantine, firms increased their demands for liquidity sharply while consumers reduced theirs. Since then, the growth of credit to firms has tended to slow down, while consumer and housing credit has grown. The financial system has responded satisfactorily to the changes in the respective demands of each group or sector and loans may grow at high rates in 2021 if GDP grows at rates close to 4.6% as the technical staff at the Bank expects; but the forecasts are highly uncertain. After the strict quarantine implemented by authorities in Colombia, the turmoil seen in March and early April, which was evident in the sudden reddening of macroeconomic variables on the risk heatmap in Graph A,[1] and the drop in crude oil and coal prices (note the high volatility registered in market risk for the region on Graph A) the local financial markets stabilized relatively quickly. Banco de la República’s credible and sustained policy response played a decisive role in this stabilization in terms of liquidity provision through a sharp expansion of repo operations (and changes in amounts, terms, counterparties, and eligible instruments), the purchases of public and private debt, and the reduction in bank reserve requirements. In this respect, there is now abundant aggregate liquidity and significant improvements in the liquidity position of investment funds. In this context, the main vulnerability factor for financial stability in the short term is still the high degree of uncertainty surrounding loan quality. First, the future trajectory of the number of people infected and deceased by the virus and the possible need for additional health measures is uncertain. For that reason, there is also uncertainty about the path for economic recovery in the short and medium term. Second, the degree to which the current shock will be reflected in loan quality once the risk materializes in banks’ financial statements is uncertain. For the time being, the credit risk heatmap (Graph B) indicates that non-performing and risky loans have not shown major deterioration, but past experience indicates that periods of sharp economic slowdown eventually tend to coincide with rises in non-performing loans: the calculations included in this report suggest that the impact of the recession on credit quality could be significant in the short term. This is particularly worrying since the profitability of credit establishments has been declining in recent months, and this could affect their ability to provide credit to the real sector of the economy. In order to adopt a forward-looking approach to this vulnerability, this Report presents several stress tests that evaluate the resilience of the liquidity and capital adequacy of credit institutions and investment funds in the event of a hypothetical scenario that seeks to simulate an extreme version of current macroeconomic conditions. The results suggest that even though there could be strong impacts on the credit institutions’ volume of credit and profitability under such scenarios, aggregate indicators of total and core capital adequacy will probably remain at levels that are above the regulatory limits over the horizon of a year. At the same time, the exercises highlight the high capacity of the system's liquidity to face adverse scenarios. In compliance with its constitutional objectives and in coordination with the financial system's security network, Banco de la República will continue to closely monitor the outlook for financial stability at this juncture and will make the decisions that are necessary to ensure the proper functioning of the economy, facilitate the flow of sufficient credit and liquidity resources, and further the smooth operation of the payment systems. Juan José Echavarría Governor