Statement of Cash Flows

Topics: Money, Cash flow statement, Currency Pages: 3 (847 words) Published: February 28, 2013
2012

Technical Summary

IAS 7 Statement of Cash Flows
as issued at 1 January 2012. Includes IFRSs with an effective date after 1 January 2012 but not the IFRSs they will replace. This extract has been prepared by IASC Foundation staff and has not been approved by the IASB. For the requirements reference must be made to International Financial Reporting Standards.

The objective of this Standard is to require the provision 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 from operating, investing and financing activities. Cash flows are inflows and outflows of cash and cash equivalents. Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Information about the cash flows of an entity is useful in providing users of financial statements with a basis to assess the ability of the entity to generate cash and cash equivalents and the needs of the entity to utilise those cash flows. The economic decisions that are taken by users require an evaluation of the ability of an entity to generate cash and cash equivalents and the timing and certainty of their generation. The statement of cash flows shall report cash flows during the period classified by operating, investing and financing activities. Operating activities Operating activities are the principal revenue-producing activities of the entity and other activities that are not investing or financing activities. Cash flows from operating activities are primarily derived from the principal revenue-producing activities of the entity. Therefore, they generally result from the transactions and other events that enter into the determination of profit or loss. The amount of cash flows arising from operating activities is a key...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Cash Flow Statement
  • Accounting Notes on Cash Flows Essay
  • Essay on The Statement of Cash Flow Is Not Redundant and Necessary for Investment Decision Making
  • Financial Accounting
  • Essay on Proposed Financial Statement Presenation
  • Analysis of Cash Flow Statement Essay
  • Statement of Cash Flows Essay
  • Statement of Cash Flow Research Paper

Become a StudyMode Member

Sign Up - It's Free