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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 September 2026

The IASB met on 23 September 2026 to discuss:

  • potential requirements for classification of acquisition-related payments, in particular:
    • payments of pre-existing debt;
    • contingent and deferred consideration; and
    • transaction costs; and
  • potential disclosure requirements for information about specified changes in specific assets and liabilities.

Classification of acquisition-related payments (Agenda Paper 20A)

The IASB tentatively decided to propose amending the requirements in paragraph 39 of IAS 7 Statement of Cash Flows to state that ‘cash flows arising from obtaining or losing control’ include only payments of items included in ‘consideration transferred’ as described in paragraph 37 of IFRS 3 Business Combinations. As a result, in the statement of cash flows:

  1. payments of deferred and contingent consideration arising from a business combination would be classified as investing activities.

    Eight of 12 IASB members agreed with this decision.

  2. payments of pre-existing debt of the acquiree in a business combination would be classified as financing activities.

    Eleven of 12 IASB members agreed with this decision.

  3. payments of transaction costs arising in a business combination would be classified as operating activities.

    All 12 IASB members agreed with this decision.

Specified changes in specific assets and liabilities (Agenda Paper 20B)

The IASB tentatively decided to propose:

  1. introducing a disclosure objective in IAS 7 that requires an entity to disclose specified non-cash changes in assets and liabilities and that enables users of financial statements to better understand the relationship between:
    1. amounts reported in an indirect method reconciliation for changes in assets and liabilities; and
    2. the same assets and liabilities presented in the statement of financial position.

    Nine of 12 IASB members agreed with this decision.

  2. requiring an entity to satisfy the disclosure objective by disclosing—for each line item in the statement of financial position that includes assets and liabilities included in the indirect reconciliation—the amounts of non-cash changes from:
    1. translating the results and financial position of foreign operations;
    2. obtaining or losing control of subsidiaries or other businesses; and
    3. reclassifying assets and liabilities in the statement of financial position.

    Nine of 12 IASB members agreed with this decision.

  3. requiring an entity to provide the information in (b) in a table.

    Ten of 12 IASB members agreed with this decision.

  4. not providing an exemption from the general requirement for an entity to disclose material information beyond that specified in (b).

    Nine of 12 IASB members agreed with this decision.

Next milestone

Exposure Draft