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The International Accounting Standards Board (IASB) is developing potential ways to improve the requirements of IAS 7 Statement of Cash Flows including:

  1. the disaggregation of cash flow information;
  2. the reporting of information about non-cash transactions;
  3. the transparency of information communicated about cash flow measures not specified in IFRS Accounting Standards;
  4. the consistent application of requirements to classify cash flows as operating, investing or financing; and
  5. the consistent application of the definition of ‘cash equivalents.’

The IASB will also consider how any improvements might apply to the statement of cash flows for financial institutions.

IASB® Update October 2026

The IASB met on 28 October 2026 to discuss:

  • potential requirements on the disaggregation of specific cash flow information, in particular:
    • disclosure of the components of total cash outflows by a lessee; and
    • specified line items that an entity would be required to disclose in the notes or consider presenting in the statement of cash flows; and
  • potential requirements to improve consistent application of the definition of cash equivalents.

Disaggregation of specific cash flow information (Agenda Paper 20A)

The IASB tentatively decided to propose amending paragraph 53(g) of IFRS 16 Leases to require lessees to disclose:

  1. the total cash outflow during the period for payments made by a lessee to a lessor relating to the right to use an underlying asset.
  2. the amounts of those payments:
    1. classified as operating activities in the statement of cash flows.
    2. included in each related line item presented in the statement of cash flows as investing or financing activities.

      Twelve of 13 IASB members agreed with these decisions.
       
  3. a description of the types of the payments included in (b)(i).

    Eleven of 13 IASB members agreed with this decision.

The IASB tentatively decided not to propose amending paragraph 53(g) to specifically require lessees to disclose the amounts of the cash flows for lease payments included in the measurement of the right-of-use asset in accordance with paragraph 24(b) of IFRS 16.

Twelve of 13 IASB members agreed with this decision.

The IASB tentatively decided not to develop specific requirements for an entity to disclose disaggregated information about cash flows from:

  1. derivatives;
  2. government grants; or
  3. dividends received from associates and joint ventures.

All 13 IASB members agreed with this decision.

Improving consistent application of the definition of cash equivalents (Agenda Paper 20B)

The IASB tentatively decided, subject to drafting changes, to propose amending paragraph 7 of IAS 7 Statement of Cash Flows to state that:

  1. an investment normally qualifies as a cash equivalent only if an entity has a right to obtain the cash flow from the investment within three months of the date of acquisition; and
  2. the entity considers all relevant contractual terms and conditions of the investment in assessing whether that condition is met.

Eleven of 13 IASB members agreed with this decision.

Some IASB members asked the staff to make clear—in finalising the drafting of the proposed amendments to paragraph 7 of IAS 7—that this decision does not change the requirement for an investment to meet all aspects of the definition of a cash equivalent to qualify as one.  

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