IAS 7 Classification of treasury shares in the consolidated cash flow statement

Date recorded:


Four scenarios were considered concerning the classification of treasury shares in the consolidated cash flow statement, under IAS 7:

• a subsidiary purchases (sells) shares of its parent;

• the parent entity purchases (sells) shares of its subsidiary from (to) minority interest holders;

• the subsidiary issues shares to minority interest holders; and

• the subsidiary purchases its own shares from minority interest holders.


Decision not to add

April 2003



While the IFRIC noted that conclusions could be drawn that were consistent with the current accounting for transactions with minority interest holders, it also noted that this accounting will probably change, given the Board’s tentative decision that transactions between majority and minority interest holders are equity transactions.  Therefore, the IFRIC agreed that the issue should be passed to the Business Combinations Phase II team for consideration of consequential amendments to IAS 7.


The classification of cash-flows arising from these scenarios has been addressed in the 1st draft of amendments to IAS 27 Consolidated and Separate Financial Statements resulting from phase II of the Business Combinations project (as a consequential amendment to IAS 7).


IFRIC reference: IAS 7

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