Effective date: | First effective as Canadian GAAP under Part I for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011, except for subsequent amendments. Earlier application of Part I was permitted. |
Published by the IASB: | September 2007 |
Included in Part I of CPA Canada Handbook: | January 2010 |
Overview
IAS 7 Statement of Cash Flows requires an entity to present a statement of cash flows as an integral part of its primary financial statements. Cash flows are classified and presented into operating activities (either using the 'direct' or 'indirect' method), investing activities or financing activities, with the latter two categories generally presented on a gross basis.
Key principles specified by IAS 7 for the preparation of a statement of cash flows are as follows:
- operating activities are the main revenue-producing activities of the entity that are not investing or financing activities, so operating cash flows include cash received from customers and cash paid to suppliers and employees [IAS 7.14]
- investing activities are the acquisition and disposal of long-term assets and other investments that are not considered to be cash equivalents [IAS 7.6]
- financing activities are activities that alter the equity capital and borrowing structure of the entity [IAS 7.6]
- interest and dividends received and paid may be classified as operating, investing, or financing cash flows, provided that they are classified consistently from period to period [IAS 7.31]
- cash flows arising from taxes on income are normally classified as operating, unless they can be specifically identified with financing or investing activities [IAS 7.35]
- for operating cash flows, the direct method of presentation is encouraged, but the indirect method is acceptable [IAS 7.18]
You will find sample IFRS statements of cash flows in our Model IFRS financial statements.
History of IAS 7
The following table shows the history of this standard subsequent to the adoption of IFRS in Canada.
Date1 | Development | Comments | Included in Part I of the CPA Canada Handbook2 |
January 2010 | Part I of the CPA Canada Handbook issued | Effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier application permitted. | January 2010 |
January 2016 | The amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted. Since the amendments are being issued less than one year before the effective date, entities need not provide comparative information when they first apply the amendments. | April 2016 | |
| August 2023 | Supplier Finance Arrangements (amendments to IAS 7 and IFRS 7) | The amended disclosure requirements enhance the transparency of supplier finance arrangements and their effects on a company’s liabilities, cash flows and exposure to liquidity risk. The amendments to IAS 7 are effective for annual periods beginning on or after January 1, 2024 with earlier application permitted, and the amendments to IFRS 7 when the amendments to IAS 7 are applied. There is a certain amount of transition relief provided, including relief regarding comparative information and interim period information. | August 2023 |
The above summary does not include details of consequential amendments made as the result of other projects.
Related Interpretations
- None
Related IFRIC Agenda Rejection Notices
The rejection notices are available in our Deloitte Global section.
- IAS 7 — Identification of cash equivalents (May 2013)
- IAS 7 — Determination of cash equivalents (July 2009)
- IAS 7 — Classification of expenditures (March 2008)
- IAS 7 — Value added tax (July 2005)
- IAS 7 — Classification of treasury shares in the consolidated cash flow statement (April 2003)
AcSB’s IFRS Discussion Group meetings
- September 10, 2015 - IAS 7: Disclosure of Interest in the Statement of Cash Flows
