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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 April 2026

The IASB met on 22 April 2026 to discuss improving the consistency with which entities apply the definition of cash equivalents in IAS 7 Statement of Cash Flows.

The IASB tentatively decided to propose including, in the definition of cash equivalents, the requirement for cash equivalents to be held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

Nine of 13 IASB members agreed with this decision.

The IASB did not make any decisions about clarifying the application guidance related to an investment with a maturity of three months or less. The IASB intends to explore alternative solutions.

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