The Handbook to IFRS Transition and to IFRS U.S. GAAP Dual Reporting

5.1 CHAPTER PREVIEW

This chapter provides ready-made dual reporting tools to assist financial statement preparers in designing the structures of the statement of cash flows under IFRSs, U.S. GAAP, and SEC rules and regulations, as well as to reconcile respective captions and line items.

This chapter first places the statement of cash flows in the context of the other financial statements, explains its location, titles used, and specific requirements for SEC registrants and foreign private issuers.

It then goes in-depth into the definition, reporting, and disclosure requirements for cash and cash equivalents.

A detailed comparison of layout allowed for presentation of the direct and indirect method of reporting cash flows from operating activities follows. This discussion also explains the pros and cons of both formats as well practical implementation points. The chapter then focuses on the structural elements of the statement of cash flows. Starting from the basic requirement to display gross inflows and gross outflows of operating, investing, and financing activities, it illustrates the general prohibition of additional aggregates, as well as exceptions such as the effects of changes in foreign currencies, or the effect of price-level adjustments. It spells out the main occurrences of noncash investing and financing transactions and related issues. It addresses the situations that may lead to net reporting of certain cash flows. Finally, it deals with the intricacies of constructing ...