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Consultation into improvements to cash flow statement launched

PN 58/16
20 Oct 2016


Improvements to the statement of cash flows are proposed in a consultation launched by the Financial Reporting Council (FRC) today.

Companies that prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) are required to follow the International Accounting Standard (IAS) 7, which is now more than 20 years old and needs modernisation.

Paul George, Executive Director for Corporate Governance and Reporting at the FRC, said,

“The statement of cash flow is important to investors because it tells them where their company’s cash has come from and where it has gone, which provides an insight into the quality of earnings.  The paper suggests several ideas for improving the transparency and consistency of the statement, while providing the company’s own perspective on the management of liquid resources. 

The paper and the responses to it will make an important contribution to the IASB’s project on Primary Financial Statements.”

The deadline for responses to the consultation is 28 February 2017 (extended to 31 March 2017).


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