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IAS 7 — Statement of Cash Flows

Effective date:

First effective as Canadian GAAP under Part I for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011, except for subsequent amendments.  Earlier application of Part I was permitted.

Published by the IASB:

September 2007

Included in Part I of CPA Canada Handbook:

January 2010


IAS 7 Statement of Cash Flows requires an entity to present a statement of cash flows as an integral part of its primary financial statements. Cash flows are classified and presented into operating activities (either using the 'direct' or 'indirect' method), investing activities or financing activities, with the latter two categories generally presented on a gross basis.

Key principles specified by IAS 7 for the preparation of a statement of cash flows are as follows:

  • operating activities are the main revenue-producing activities of the entity that are not investing or financing activities, so operating cash flows include cash received from customers and cash paid to suppliers and employees [IAS 7.14]
  • investing activities are the acquisition and disposal of long-term assets and other investments that are not considered to be cash equivalents [IAS 7.6]
  • financing activities are activities that alter the equity capital and borrowing structure of the entity [IAS 7.6]
  • interest and dividends received and paid may be classified as operating, investing, or financing cash flows, provided that they are classified consistently from period to period [IAS 7.31]
  • cash flows arising from taxes on income are normally classified as operating, unless they can be specifically identified with financing or investing activities [IAS 7.35]
  • for operating cash flows, the direct method of presentation is encouraged, but the indirect method is acceptable [IAS 7.18] 

You will find sample IFRS statements of cash flows in our Model IFRS financial statements.


History of IAS 7

The following table shows the history of this standard subsequent to the adoption of IFRS in Canada. 




Included in Part I of the CPA Canada Handbook2

January 2010

Part I of the CPA Canada Handbook issued

Effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier application permitted.

January 2010

January 2016

Disclosure Initiative – Narrow scope amendments to IAS 7

The amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted. 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.

April 2016


  1. For further details of relevant developments prior to this, please refer to our Deloitte Global section.
  2. Newly issued, amended or revised IFRSs are part of Canadian GAAP only after they are approved by the Accounting Standards Board in accordance with its due process.

The above summary does not include details of consequential amendments made as the result of other projects.

Related Interpretations

  • None

Related IFRIC Agenda Rejection Notices

The rejection notices are available in our Deloitte Global section.

  • IAS 7 — Identification of cash equivalents (May 2013)
  • IAS 7 — Determination of cash equivalents (July 2009)
  • IAS 7 — Classification of expenditures (March 2008)
  • IAS 7 — Value added tax (July 2005)
  • IAS 7 — Classification of treasury shares in the consolidated cash flow statement (April 2003)

AcSB’s IFRS Discussion Group meetings

Amendments under consideration

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.