IAS 7 Statement of Cash Flows

International Accounting Standard 7

Overview of IAS 7

  • Issued: in 1977; re-issued in 1992, followed by amendments
  • Effective date: 1 January 1994
  • What it does:
    • It requires the presentation of changes in cash and cash equivalents in the form of statement of cash flows;
    • It defines cash and cash equivalents and explains what is and what is NOT included in cash flow movements.
    • It classifies the cash flows as either from operating, investing or financing activities.
    • It requires reporting cash flows from operating activities either by direct or indirect method.
    • In relation to reporting cash flows from investing and financing activities, IAS 7 asks to report gross receipts and payments with several exceptions where net basis is allowed.
    • It also deals with several specific transactions, such as foreign currency cash flows, interest and dividends, taxes on income, investments in subsidiaries, associates and joint ventures, changes in ownership interests in subsidiaries and other businesses, non-cash transactions etc.

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