Friday 09 October 2015
The objectives of the proposed amendments are to improve:
The IASB is undertaking this work in response to the Agenda Consultation 2011, during which users asked it to consider improving the disclosure requirements in its Standards regarding ‘net debt’. Users also requested improved information about cash and cash equivalent balances.
The IASB published an Exposure Draft in December 2014. The Exposure Draft proposes two amendments to IAS 7 Statement of Cash Flows.
The first amendment proposes that an entity should disclose a reconciliation of the amounts in the opening and closing statements of financial position for each item for which cash flows have been, or would be, classified as financing activities in the statement of cash flows, excluding equity items.
The result of requiring this reconciliation is that investors will be provided with improved disclosures about an entity’s debt and movements in debt during the reporting period.
The second amendment proposes to extend the disclosures required by IAS 7 about an entity’s liquidity and proposes disclosures about the restrictions that affect the decisions of an entity to use cash and cash equivalent balances, including tax liabilities that would arise on the repatriation of foreign cash and cash equivalent balances.
This Exposure Draft also includes proposed changes to the IFRS Taxonomy to reflect the effect of the proposed amendments to IAS 7. This is the first time that proposed changes to the IFRS Taxonomy have been included in an Exposure Draft.
The proposed amendments to IAS 7 was discussed at the June IASB meeting
Investor Perspective: 'Helping Investors Better Understand Cash Flow'
IASB makes progress on improving the effectiveness of disclosure in financial reporting
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