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14/07/2015 - EFRAG Short Discussion Series - The Statement of Cash Flows: issues for Financial Institutions

EFRAG has published a paper in the Short Discussion Series. This paper discusses the relevance of the Statement of Cash Flows for financial institutions and investigates alternatives that could either supplement or replace the information currently portrayed by these entities in the Statement of Cash Flows.

The EFRAG Short Discussion Series addresses topical and problematic issues with the aim of helping the IASB to address ways to improve financial reporting after having stimulated debate among European constituents and beyond.

The paper discusses how the nature of the business activities of financial institutions may affect the relevance of the statement of cash flows as required by IAS 7 Statement of Cash Flows and discusses two alternatives for these entities:

a)    To replace the statement of cash flows with other disclosures; or

b)    To modify some of the requirements in IAS 7.

Views of constituents are welcomed and requested by 31 March 2016. EFRAG notes that this period is longer than the period normally provided in other Discussion Papers. However, EFRAG is aware that there are a number of issues that will require the attention of European constituents in the coming months, especially the Exposure Draft Conceptual Framework for Financial Reporting, the IFRS Foundation Review, the IASB Agenda Consultation, the forthcoming standard on leases and the finalisation of the Insurance project. During the comment period, EFRAG also wants to gather information from users and preparers in order to build with them proposals after evaluating the alternatives presented in the Discussion Paper.

The discussion paper can be found below.