IASB proposes amendments to IAS 7 as result of the Disclosure initiative

  • IASB document (blue) Image

18 Dec 2014

The International Accounting Standards Board (IASB) has published an Exposure Draft (ED) of proposed amendments to IAS 7 'Statement of Cash Flows'. The amendments aim at clarifying IAS 7 to improve information provided to users of financial statements about an entity's financing activities and liquidity. Comments are requested by 17 April 2015.



The IASB added an initiative on disclosure to its work programme in 2013 to complement the work being done in the Conceptual Framework project. The initiative is made up of a number of smaller projects that aim at exploring opportunities to see how presentation and disclosure principles and requirements in existing Standards can be improved. Among them is a narrow scope project on IAS 7 Statement of Cash Flows to improve information provided to users of financial statements about an entity's financing activities and liquidity.


Suggested changes

The IASB proposes in ED/2014/6 Disclosure Initiative (Proposed amendments to IAS 7) amendments with two objectives:

  • Improved information about an entity's financing activities, excluding equity items. The IASB proposes that an entity should disclose a reconciliation of the amounts in the opening and closing statements of financial position for each item for which cash flows have been, or would be, classified as financing activities in the statement of cash flows, excluding equity items. The reconciliation should include (i) opening balances in the statement of financial position, (ii) movements in the period, and (iii) closing balances in the statement of financial position. The proposed amendments also include an illustrative example.
  • Improved disclosures about the liquidity of an entity. The IASB proposes to extend the disclosures by adding required disclosures about restrictions that affect the decisions of an entity to use cash and cash equivalent balances, including tax liabilities that would arise on the repatriation of foreign cash and cash equivalent balances.

This is also the first time an IASB Exposure Draft includes proposed changes to the IFRS Taxonomy to reflect the effect of the proposed amendments.


Dissenting opinion

One Board member voted against the publication of the ED as this Board member believes that (i) it would be more appropriate to address the suggested amendments from a broader point of view as part of the principles of disclosure research project, (ii) the proposed amendments do not meet the needs of users of financial statements, and (iii) the costs of preparing the proposed reconciliation could be larger than expected.


Effective date and transition requirements

The ED does not contain a proposed effective date. However, the ED proposes that the amendments would be applied prospectively without further transition requirements.


Additional information

Please click for:

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.