IAS 7 Cash Flow Statement Reporting Requirements

IAS 7: Reporting Cash Flows

Net Cash Flows

Cash flows from operating, investing, and financing activities may be presented on a net basis for the following:

• Receipts and payments on behalf of clients: Provided the cash flows reflect the customer's activity rather than the company's.
• High-turnover items: Cash receipts and payments for items with high turnover and short maturities.

Financial institutions may report the following on a net basis:

• Receipts and payments for the acceptance and repayment of deposits with a fixed maturity date.
• Allocation and collection of deposits in other financial institutions.
• Advances and loans made to customers, including the reimbursement of these items.

Interest and Dividends

Cash flows for interest received, interest paid, and dividends received or paid must be disclosed separately. Each item must be classified consistently each year as operating, investing, or financing activities.

Income Taxes

Cash flows from income taxes must be shown separately and classified as operating activities, unless they can be specifically identified with investing or financing activities.

Acquisitions and Disposals

The aggregate cash flows arising from the acquisition or disposal of subsidiaries and other business units must be presented separately and classified as investing activities.

Non-Monetary Transactions

Investing and financing transactions that do not require the use of cash or cash equivalents must be excluded from the cash flow statement. However, these must be disclosed elsewhere in the financial statements to provide relevant information.

Cash and Cash Equivalents

An enterprise must disclose the components of its cash and cash equivalents and provide a reconciliation of the balances in the cash flow statement with the equivalent items in the balance sheet.

Other Disclosures

Companies must disclose, along with management commentary, any significant cash and cash equivalent balances that are not available for use by the company or its group.