Statement of Cash Flows and Related Matters

The IASB met on 11 December 2025 to discuss:

• outstanding matters related to extending the requirements for management-defined performance measures (MPMs) to include cash flow measures (Agenda Paper 20A);
• improving consistency in classifying cash flows as operating, investing or financing (Agenda Paper 20B); and
• improving consistency in presenting cash flows from continuing and discontinued operations (Agenda Paper 20C).

Improving the transparency of information about cash flow measures (Agenda Paper 20A)

The IASB tentatively decided to propose:

1. including requirements for MPMs for cash flow measures in IFRS 18 Presentation and Disclosure in Financial Statements and not in IAS 7 Statement of Cash Flows. 
   
   Eleven of 12 IASB members agreed with this decision.
   
   
2. extending the definition of MPMs in paragraph 117 of IFRS 18 from ‘a subtotal of income and expenses’ to ‘a subtotal of income and expenses or a subtotal of cash inflows and outflows’.
   
   All 12 IASB members agreed with this decision.
   
   
3. including application guidance in IFRS 18 to clarify that subtotals combining income and expenses and cash flows are MPMs.  
   
   All 12 IASB members agreed with this decision.
   
   
4. including application guidance in IFRS 18 to require an entity to disclose the effects of income tax and non-controlling interest for reconciling items if reconciling an MPM that is a subtotal of income and expenses and cash flows to a subtotal in the statement of profit or loss.
   
   Ten of 12 IASB members agreed with this decision.
   
   
5. specifying that some subtotals of cash inflows and outflows are not MPMs, namely: 
   1. the subtotal of the operating activities category; 
   2. the subtotal of the investing activities category; and 
   3. the subtotal of the financing activities category. 
      
      All 12 IASB members agreed with this decision.
       
6. extending the disclosure requirement in B137(a) so that, for each reconciling item, an entity be required to disclose the amount(s) related to each line item in the statement to which the MPM is reconciled—that is:
   1. to disclose amounts related to line items in the statement of profit or loss if the MPM is reconciled to that statement; and
   2. to disclose amounts related to line items in the statement of cash flows if the MPM is reconciled to that statement.
      
      All 12 IASB members agreed with this decision.
       

The IASB will further research the benefits and costs of applying this disclosure requirement to reconciling items that relate to operating activities in the statement of cash flows when reported using the indirect method.

Classification and presentation of cash flows (Agenda Paper 20B)

The IASB tentatively decided:

1. to explore:  
   1. developing requirements for the classification of acquisition-related payments in a business combination; 
   2. developing requirements for the classification and presentation of cash flows from derivatives; 
   3. developing requirements for the classification and presentation of receipts of government grants; and 
   4. amending the principle for classifying cash flows in paragraph 11 of IAS 7 to help entities apply the principle more consistently; and 
2. to revisit two issues after the IASB has concluded its discussions on strengthening the disclosure requirements on non-cash transactions and other non-cash changes, namely: 
   1. classification of deferred payments; and 
   2. classification and presentation of cash flows involving third-party finance providers. 

All 12 IASB members agreed with this decision.

Presentation of cash flows from continuing and discontinued operations (Agenda Paper 20C)

The IASB tentatively decided to propose requiring an entity to present cash flows from discontinued operations in a separate category of the statement of cash flows.

All 12 IASB members agreed with this decision.