Financial Reporting Lab publishes report on disclosure on the sources and uses of cash

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25 Sep 2019

A new report from the Financial Reporting Lab of the Financial Reporting Council (FRC) considers how companies can answer investors’ questions about how a company generates cash and how it intends to use that cash.

The report provides practical guidance on how companies can give more information and context around the generation, availability and use of cash. In particular it explains that investors want cash disclosures that:

  • provide a clear description of the drivers of current (and future) performance and position, in the context of cash, supported by appropriate metrics; 
  • explain the sources of cash and the ways in which cash is used; and
  • describe the processes, controls and sources of assurance in place in relation to cash.

The report encourages companies to look beyond the disclosures that relate to the cash flow statement and address areas such as business model disclosures, capital allocation frameworks and reverse factoring arrangements. 

Please click to access the press release and report on the FRC website.

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