Statement of Cash Flows and Related Matters

The IASB met on 22 July 2025 to discuss how the requirements for management-defined performance measures (MPMs) in IFRS 18 Presentation and Disclosure in Financial Statements could be extended to also apply to cash flow measures. Extending these requirements would respond to stakeholder feedback that users of financial statements need more transparent information about cash flow measures not specified in IFRS Accounting Standards.

The IASB tentatively decided to propose extending the requirements for MPMs in IFRS 18 to also apply to measures relating to the statement of cash flows not specified in IFRS Accounting Standards (cash flow measures). The proposed requirements would apply to cash flow measures, subject to the definition of an MPM and the applicability of the related disclosure requirements.

Twelve of 13 IASB members agreed with this decision.

The IASB tentatively decided to propose:

1. applying to cash flow measures, unchanged, the parts of the IFRS 18 definition of an MPM that describe an MPM as a measure that:
   1. an entity uses in public communications outside financial statements; and
   2. an entity uses to communicate to users of financial statements management’s view of an aspect of the financial performance of the entity as a whole; and
2. extending the rebuttable presumption for MPMs in IFRS 18 so it also applies to cash flow measures.

All 13 IASB members agreed with this decision.

The IASB tentatively decided to propose extending the disclosure objective for MPMs and specific disclosure requirements for MPMs in IFRS 18 to also apply to cash flow measures. The IASB will further consider any drafting changes required when these disclosure requirements are applied to those measures—specifically, the requirements for an entity:

1. to disclose information about all measures that meet the definition of MPMs in a single note.
2. to disclose that the MPMs provide management’s view of an aspect of the financial performance of the entity as a whole and are not necessarily comparable with measures sharing similar labels or descriptions provided by other entities.
3. to label and describe each MPM in a clear and understandable manner that does not mislead users of financial statements.
4. to disclose a description of the aspect of financial performance that, in management’s view, is communicated by the MPM. The entity is required to include in this description explanations of why, in management’s view, the MPM provides useful information about the entity’s financial performance.
5. to disclose how each MPM is calculated.
6. to disclose a reconciliation between the MPM and the most directly comparable subtotal or total specified by IFRS Accounting Standards.
7. to disclose information if the entity changes how it calculates an MPM, adds a new MPM or ceases using a previously disclosed MPM—specifically, to disclose:
   1. an explanation that enables users of financial statements to understand the change, addition or cessation and its effects.
   2. the reasons for the change, addition or cessation.
   3. restated comparative information to reflect the change, addition or cessation unless it is impracticable to do so. An entity’s selection of an MPM is not an accounting policy choice. Nonetheless, in assessing whether restating the comparative information is impracticable, an entity is required to apply the requirements in paragraphs 50–53 of IAS 8 Basis of Preparation of Financial Statements.

All 13 IASB members agreed with this decision.

The IASB tentatively decided not to propose extending a requirement for MPMs in IFRS 18 to apply to cash flow measures. Specifically, the IASB tentatively decided not to propose extending the requirement for an entity to disclose the income tax effect and the effect on non-controlling interests for each item disclosed in the reconciliation described in (f).

All 13 IASB members agreed with this decision.