Objective of IAS 7. The objective of IAS 7 is to require the presentation of information about the historical changes in cash and cash equivalents of an entity by means of a statement of cash flows, which classifies cash flows during the period according to operating, investing, and financing activities.
What does IAS 7 require for cash flow statements?
IAS 7 requires that the components making up the total opening and closing balances of cash and cash equivalents in the Statement of Cash Flows should be disclosed. These totals should be reconciled to the appropriate line items in the Statement of Financial Position (IAS 7.45).
What is FunFundamental principle in IAS 7?
Fundamental principle in IAS 7. All entities that prepare financial statements in conformity with IFRSs are required to present a statement of cash flows. [IAS 7.1] The statement of cash flows analyses changes in cash and cash equivalents during a period.
What is IAS 8 in accounting?
IAS 8: Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies. This standard is supposed to guarantee that all enterprises present their income statement in a consistent form. It defines ordinary business activities and requires disclosing extraordinary items separately.
How should cash flows be classified in IAS 7?
Principle 1 – cash flows in IAS 7 should be classified in accordance with the nature of the activity to which they relate (i.e., most appropriate to the business of the entity), or. Principle 2 – cash flows in IAS 7 should be classified consistently with the classification of the related or underlying item in the statement of financial position.
What was discussed at the January 2012 meeting of the IASB?
At its January 2012 meeting, the IASB discussed two statement of cash flow issues that had been considered by the Committee. Both of these issues related to classification under IAS 7 Statement of Cash Flows and included:
