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IASC releases ED on cash flow statements.


The International Accounting Standards Committee (IASC) has released exposure draft no. 36, Cash Flow Statements. The proposed new standard would replace a present requirement in International Accounting Statement no. 7, Statement of Changes in Financial Position.

The ED proposes the cash flow statement should report cash inflows and outflows and cash equivalents during the reporting period. Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments.

The ED also proposes the cash flows of an enterprise be classified by investing, financing and operating activities. Investing activities are the acquisition and disposal of long-term assets and other investments that are not included in cash and cash equivalents. Financing activities are those that result in changes in the size and composition of the equity and debt capital of the enterprise. All other activities are classified as operating activities.
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Title Annotation:exposure draft
Publication:Journal of Accountancy
Date:Sep 1, 1991
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