This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice (http://www2.deloitte.com/ca/en/legal/cookies.html) for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Disclosure initiative — Reconciliation of liabilities from financing activities (Amendments to IAS 7) [Completed]

Effective date: The amendments are ef­fec­tive for an­nual pe­ri­ods be­gin­ning on or af­ter Jan­u­ary 1, 2017, with ear­lier ap­pli­ca­tion be­ing per­mit­ted.

Transitional provisions:

Since the amend­ments are be­ing is­sued less than one year be­fore the ef­fec­tive date, en­ti­ties need not pro­vide com­par­a­tive in­for­ma­tion when they first ap­ply the amend­ments.

Last updated:

December 2016

Overview

The IASB has undertaken a broad-based initiative to explore how disclosures in IFRS financial reporting can be improved. This initiative has been informed by a Discussion Forum on Disclosure in Financial Reporting that was held in January 2013. In conjunction with this, the IASB staff also conducted a survey. A Feedback Statement on these events was published in May 2013.

The Disclosure Initiative is currently made up of a number of implementation and research projects, as follows:

  1. certain narrow focus amendments to IAS 1, Presentation of Financial Statements [see separate project]
  2. these narrow focus amendments to IAS 7, Statement of Cash Flows;
  3. a major project on changes in accounting policies and estimates [see separate project];
  4. a major project on materiality [see separate project];
  5. a major project on the principles of disclosure (including the Standards-level Review of Disclosures) [see separate project]; and
  6. a research project on general disclosure issues.

The narrow focus amendments to IAS 7 were issued by the IASB on January 29, 2016 and come with the objective that entities shall provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities.

To the extent necessary to achieve this objective, the IASB requires that the following changes in liabilities arising from financing activities are disclosed:

  1. changes from financing cash flows;
  2. changes arising from obtaining or losing control of subsidiaries or other businesses;
  3. the effect of changes in foreign exchange rates;
  4. changes in fair values; and
  5. other changes.

The IASB defines liabilities arising from financing activities as liabilities "for which cash flows were, or future cash flows will be, classified in the statement of cash flows as cash flows from financing activities". It stresses that the new disclosure requirements also relate to changes in financial assets if they meet this definition.

The amendments state that one way to fulfill the new disclosure requirements is to provide a reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities. This is a departure from the December 2014 Exposure Draft that had proposed that such a reconciliation should be required.

Finally, the amendments state that changes in liabilities arising from financing activities must be disclosed separately from changes in other assets and liabilities.

Other developments

January 2016

On Jan­u­ary 29, 2016, the IASB pub­lished amend­ments to IAS 7, Statement of Cash Flows. The amend­ments are in­tended to clar­ify IAS 7 to im­prove in­for­ma­tion pro­vided to users of fi­nan­cial state­ments about an en­tity's fi­nanc­ing ac­tiv­i­ties. They are ef­fec­tive for an­nual pe­ri­ods be­gin­ning on or af­ter Jan­u­ary 1, 2017, with ear­lier ap­pli­ca­tion be­ing per­mit­ted.

January 2015

On January 27, 2015, the AcSB issued an ED that corresponds to the IASB’s ED on this topic.

December 2014

On December 18, 2014, as part of the Disclosure Initiative, the IASB issued for public comment an Exposure Draft entitled Reconciliation of liabilities from financing activities (Proposed Amendments to IAS 7).

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.