IAS 7
From ACT Wiki
Financial reporting - International Financial Reporting Standards (IFRS).
International Accounting Standard 7, dealing with statement of cash flows.
IAS 7 prescribes how to present information in a statement of cash flows about how a reporting entity’s cash and cash equivalents changed during the financial reporting period under review.
IAS 7 is issued by the International Accounting Standards Board.
- Direct method of presentation is encouraged
- "An entity shall report cash flows from operating activities using either:
- (a) the direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed; or
- (b) the indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows.
- Entities are encouraged to report cash flows from operating activities using the direct method.
- The direct method provides information which may be useful in estimating future cash flows and which is not available under the indirect method..."
- IAS 7 - paragraphs 18 and 19.
See also
- ASC 230
- Cash
- Cash equivalents
- Cash flow
- Cash flow statement
- Direct method
- Financial reporting
- FRS 102
- Indirect method
- International Accounting Standards Board
- International Financial Reporting Standards
- Reporting entity
- Statement of cash flows