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)
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.
More about:
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn 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 resourceIn 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 resourceThe 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 resourceThe accountancy industry has been hit by several exam cheating cases over the last few years Read More...
View articleSir Donald Brydon’s report into the quality and effectiveness of audit was published at the end of 2019, and in it, Brydon tackles the issues of the a...
View articleThe FRC has issued revised ethical and auditing standards in an effort to strengthen auditor independence and ban conflicts of interest. Read More...
View articleIFRS 16 is fully effective for accounting periods beginning on or after 1 January 2019 and brings about significant changes for lessee accounting - by...
View article75% of FTSE 350 audits assessed as good or requiring limited improvements, failing to meet the FRC's 90% target Read More...
View articleProfessor Richard Murphy argues that IFRS accounting is inappropriate in the era when we are tackling the climate crisis and must be replaced Read Mor...
View articleComments and push-back from accountants led to the change in FRS102 which gives an exemption on director’s loans, according to Steve Collings. Read Mo...
View articleThe incoming IFRS 17 insurance accounting standard is an “opportunity” for accountants to highlight their value to their companies, according to Moody...
View article