Statement of Cash Flows and Related Matters

The IASB added a project on the Statement of Cash Flows and Related Matters to its research pipeline following feedback on its Request for Information: Third Agenda Consultation.

In the Feedback Statement to the Request for Information (published July 2022) most respondents recommended the addition of a potential project on cash flows to the IASB’s workplan and many of them rated it as high priority.

The IASB staff are performing 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 discussed the initial research outcomes in March 2025. In May 2025, it determined which topics it plans to include in the project plan and a draft timeline. The IASB will decide on the project direction in Q4 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 also helps deliver on the UKEB’s 2024-25 Regulatory Strategy aim to influence IASB early in its development cycle.

The research is grounded in previous work undertaken by the IASB, FRC and UKEB. It gathers primary evidence on the improvements investors and creditors want made to the statement of cash flows, and preparer views on these possible improvements. This provides a foundation for the UKEB’s proposal of potential solutions for the problems already identified by the IASB, and other concerns raised by UK stakeholders during UKEB outreach for this project.

Project Outputs

The UKEB has prepared the following draft research papers. The relevant documents are available in the timeline below:

• UKEB Research Paper 1. Statement of Cash Flows: Background and Key Issues (December 2024) – based on desk-based research, exploring perceived issues with the statement of cash flows.
• UKEB Research Paper 2. Statement of Cash Flows: Non-mandatory and Voluntary Cash Flow Disclosures Provided by UK Listed Companies (February 2025) – based on a review of current reporting practices among UK listed companies. This research highlighted an opportunity to leverage the existing UK practice for supplementary disclosures that could enhance statutory reporting of cash flows and related matters. Examples of such voluntary cash flow disclosures were discussed during some of the later interviews conducted with users and preparers (between December 2024 and March 2025 to inform the third UKEB research paper) to determine what voluntary disclosures are most useful, and to understand how the information is used.
• UKEB Research Paper 3. Statement of Cash Flows: UK User and Preparer Perspectives (March 2025) – based on interviews with investors and preparers to better understand their perspectives on the current and potential future reporting requirements.

At the March 2025 Board meeting, the UKEB agreed:

• to publish a consolidated summary of the three research papers completed at that date (with the full research papers as appendices)
• to undertake additional research examining:
  • Alternative presentation formats and disclosures for the statement of cash flows
  • Interconnectivity of IFRS Standards / Cohesiveness of Financial Statements

On 4 July 2025, the UKEB published its consolidated summary of the three research papers. The relevant document is available in timeline below.

For the initial phase of research, 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 has consulted 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

In June 2025, the UKEB consulted with UKEB Advisory Groups on some potential solutions to priority issues identified by UK stakeholders during the initial phase of research. Possible solutions developed by the UKEB were refined and further consulted on via interviews with a range of users.

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.