Grant Thornton International Ltd has published the first article in its new Insights into IAS 7 series, entitled IAS 7 at a Glance.
IAS 7 Statement of Cash Flows was introduced in 2001 and the accounting principles have remained largely unchanged since. The increasing attention on an entity’s cash generation and liquidity position has led to greater focus on the statement of cash flows by financial statement users, regulators and other commentators. However, this additional focus and closer scrutiny have also highlighted some common errors and inconsistencies in the application of IAS 7.
The new Insights into IAS 7 series is aimed at simplifying the requirements of the standard by explaining the fundamentals of reporting cash flows using relatively simple language and providing insights to help entities cut through some of the complexities associated with these requirements.
This first article in the series provides an overview of the objective, scope and requirements of IAS 7.