Wiley 2022 Interpretation and Application of IFRS Standards

6STATEMENT OF CASH FLOWS

• Introduction
• Scope
• Definitions of Terms
• Background
  • Benefits of Statement of Cash Flows
  • Exclusion of Non‐Cash Transactions
  • Components of Cash and Cash Equivalents
• Presentation
  • Classifications in the Statement of Cash Flows
  • Reporting Cash Flows from Operating Activities
    • Direct vs. indirect methods
• Other Requirements
  • Gross vs. Net Basis
  • Foreign Currency Cash Flows
  • Cash Flow per Share
  • Net Reporting by Financial Institutions
  • Reporting Futures, Forward Contracts, Options and Swaps
  • Reporting Extraordinary Items in the Statement of Cash Flows
  • Reconciliation of Cash and Cash Equivalents
  • Acquisitions and Disposals of Subsidiaries and Other Business Units
• Disclosure and Examples
  • Changes in Liabilities Arising from Financing Activities
• Consolidated Statement of Cash Flows
• Future Developments
• US GAAP Comparison

INTRODUCTION

IAS 7, Cash Flow Statements, became effective in 1994.

The purpose of the statement of cash flows is to provide information on how the entity generates and spends cash. In doing so, the statement of cash flows presents cash flows which are free from other non‐cash accounting items, such as depreciation and impairment charges, for example.

1. By focusing on cash flows the statement provides a useful basis for users of financial statements to assess the ability of the entity to generate cash (and cash equivalents) and to obtain a clearer view on how the entity uses and expends its cash balances including its ability to distribute ...