The Grant Thornton International IFRS team has published a new guide: IAS 7:  Statement of Cash Flows—a guide to avoiding common pitfalls and application issues. The guide aims to: 

  • remind management of the basic requirements for preparing the statement of cash flows;
  • highlight interpretative and practical application issues noted by regulators and commentators; and
  • provide insights on avoiding the common pitfalls and application issues that regulators and our IFRS experts see in practice. 

The statement of cash flows

Cash flow reporting is addressed in IAS 7Statement of Cash Flows and the statement of cash flows forms part of an entity’s complete set of financial statements in accordance with paragraph 10 of IAS 1 Presentation of Financial Statements. Further, IAS 7 requires all entities to present a statement of cash flows, without exception (IAS 7.3).

The increasing attention on cash generation and liquidity position has led to greater focus on the statement of cash flows by financial statement users and regulators. This additional focus and scrutiny has also highlighted some common errors and inconsistencies in the application of IAS 7.


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