Cash Flow Statements require classification of cash flows by operating, investing and financing activities to assess liquidity. An enterprise must present a cash flow statement classifying cash flows into operating, investing and financing activities, disclose components of cash and cash equivalents and reconcile them to the balance sheet, and report cash flows by either the direct or indirect method. Cash equivalents are short term, highly liquid investments held to meet short term cash commitments. Net reporting is allowed only in limited circumstances; non cash investing and financing transactions are excluded from the cash flow statement but must be disclosed elsewhere.