What is the appropriate focus for the proprietary fund statement of cash flows?

The focus for the proprietary fund statement of cash flows should ideally include both cash and cash equivalents. This is because proprietary funds, which encompass enterprise funds and internal service funds, are designed to operate in a manner similar to private sector businesses, providing essential services on a user charge basis.

Understanding cash and cash equivalents provides a comprehensive view of a fund's liquidity and its ability to meet short-term obligations. Cash equivalents include investments that are readily convertible into cash with an insignificant risk of change in value, thus maximizing the information available to assess the fund's financial viability.

By capturing both elements, the statement of cash flows can provide a clearer picture of the cash movements and the overall financial health of the proprietary fund, which is essential for stakeholder decisions and evaluations. Therefore, it is appropriate to focus on both cash and cash equivalents in this context.