Statement of Cash Flows and Related Matters

The IASB staff plan to perform initial research to gather evidence of the nature and extent of the perceived deficiencies and the likely benefits of developing new financial reporting requirements for IAS 7 Statement of Cash Flows. This research is intended to provide evidence to support the IASB’s decision on the scope of the project. The initial research will also address possible ways of improving the perceived deficiencies. The IASB plans to discuss the initial research outcomes and determine next steps in the first quarter of 2025.

Project Objectives

A UKEB project on the statement of cash flows and related matters supports meeting its responsibilities regarding thought leadership in accordance with the UKEB Terms of Reference. It will also help deliver the UKEB’s 2024-25 Regulatory Strategy (page 8) aim to influence IASB early in its development cycle.

The research will be grounded in previous work undertaken by the IASB, FRC and UKEB. It will gather primary evidence on the improvements investors and creditors want made to the statement of cash flows, and preparer views on these possible improvements. This will provide a foundation for the UKEB to propose potential solutions for the problems already identified by the IASB for this project.

Project Outputs

The UKEB will prepare a series of research reports, including:

• December 2024: Background paper – this research paper will set the stage, examining the background of the project, relevant research and previous CRR findings.
• March 2025: UK Investor and Preparer Perspectives paper – this research paper will summarise user and preparer perspectives on how the Statement of Cash Flows could be improved including consideration of financial institutions.

In meetings subsequent to the March 2025 Board meeting, the UKEB will consider whether:

• the UKEB papers, developed to that point, should be consolidated into a single comprehensive report for publication; and
• whether additional research is appropriate and feasible given the IASB’s project plan and UKEB priorities at that time.

The UKEB conducted interviews with a diverse range of preparers and users of financial statements, between December 2024 and March 2025 and invited users to complete a short User poll between 25 March and 22 April 2025. In addition, the UKEB will continue to consult with UKEB Advisory Groups.

On 12 March 2025, the UKEB presented to the International Forum of Accounting Standard Setters (IFASS) on the research conducted to date, including the findings from the interviews undertaken and a review of a sample of annual reports of UK listed companies. The presentation is below.

International Forum of Accounting Standard Setters Slides

If you would like to contribute to the UKEB research work on this project, please email us at [email protected] with Statement of Cash Flows in the email subject.