Cashflow statement improvements targeted by watchdog

Cashflow statement improvements targeted by watchdog

Improvements to cashflow statements are being targeted in a consultation launched by the Financial Reporting Council (FRC)

IMPROVEMENTS to cashflow statements are being targeted in a consultation launched by the Financial Reporting Council (FRC).

The paper aims to identify possible “evolutionary improvements” to the statement of cashflows as currently required by IAS 7.

Paul George, executive director for corporate governance and reporting at the FRC, said: “The paper suggests several ideas for improving the transparency and consistency of the statement, while providing the company’s own perspective on the management of liquid resources.”

Companies that prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) are required to follow the International Accounting Standard (IAS) 7. The basis of this standard is more than 20 years old, with the FRC highlighting the need for modernisation and improvements.

Some topics that are being addressed include: issues that arise in the context of financial institutions; and the reporting of restricted cash and the reconciliation of net debt.

The FRC’s Financial Reporting Lab has published a number of reports that are relevant to the issues discussed in this paper including; operating and investing cash flows (November 2012), net debt reconciliations (September 2012), and debt terms and maturity tables (November 2012).

George concluded: “The paper and the responses to it will make an important contribution to the IASB’s project on primary financial statements.”

The deadline for responses to the consultation is 28 February 2017.

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

Professional Services Why Professional Services Firms Should Ditch Folders and Embrace Metadata

1y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

2y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine

Accounting Firms Turn Accounts Payable into a value-engine

1y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021

Making Tax Digital Digital Links: A guide to MTD in 2021

1y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource