While requirements of US GAAP and IFRS regarding statement of cash flows are broadly similar, IFRS allows greater discretion in classification of interest income/expense, dividends, etc.
Cash flow from Operating Activity: Revenue from Operations has increased in 2016 as compared to 2015, hence it is an inflow of Rs. 100000.00 ; Raw Materials has increased in 2016 as compared to 2015, hence it is an outflow of Rs. 10000.00 ; Income tax has decreased in 2016 as compared to 2015, hence it is an inflow of Rs. 3000.00 ; Interest Received decreased in 2016 as compared to 2015, hence ...
In April 2001 the International Accounting Standards Board adopted IAS 7 Cash Flow Statements, which had originally been issued by the International Accounting Standards Committee in December 1992.IAS 7 Cash Flow Statements replaced IAS 7 Statement of Changes in Financial Position (issued in October 1977).. As a result of the changes in terminology used throughout the IFRS Standards arising ...
The IFRS vs US GAAP refers to two accounting standards and principles adhered to by countries in the world in relation to financial reporting
Under IFRS Standards, the primary consideration for the classification of cash flows is the nature of the activity to which they relate. Under US GAAP, the classification of an item on the balance sheet, and its related accounting, often informs the appropriate classification in the statement of cash flows. As such, different classification and ...
A company is required to present a statement of cash flows that shows how its cash and cash equivalents have changed during the period. Cash flows are classified as either operating, investing or financing activities, depending on their nature.
An overriding test for ‘cash equivalents’ is that they are held for the purpose of meeting short-term cash commitments rather than for investing or other purposes. Where significant amounts are not available for use by the group, IAS 7 requires disclosure of the amount and commentary on the restriction.
Under IFRS Standards, ‘restricted cash’ is not defined and there is no specific guidance on whether restricted amounts should be included in a company’s beginning or ending cash and cash equivalent balances in the statement of cash flows. However, to meet the definition of cash and cash equivalents, among other criteria the amounts should be either held on hand, available to be withdrawn at any time without penalty or readily convertible into known amounts of cash. An overriding test for ‘cash equivalents’ is that they are held for the purpose of meeting short-term cash commitments rather than for investing or other purposes. Where significant amounts are not available for use by the group, IAS 7 requires disclosure of the amount and commentary on the restriction.
allowing companies to elect to present cash flows from operating activities using either the direct method (showing receipts from customers, payments to suppliers, etc.) or indirect method (profit or loss for the period reconciled to the total net cash flows from operating activities).
Payments made ‘soon after’ the acquisition date are classified as investing activities; we believe that three months or less is an appropriate interpretation of ‘soon after’.
The right to offset between bank accounts is considered when determining if an account is overdrawn. This assessment considers criteria in IAS 32, Financial Instruments: Presentation under IFRS Standards; and ASC 210, Balance Sheet, under US GAAP.
Under IFRS Standards, the primary consideration for the classification of cash flows is the nature of the activity to which they relate. Under US GAAP, the classification of an item on the balance sheet, and its related accounting, often informs the appropriate classification in the statement of cash flows. As such, different classification and ...
A company is required to present a statement of cash flows that shows how its cash and cash equivalents have changed during the period. Cash flows are classified as either operating, investing or financing activities, depending on their nature.
An overriding test for ‘cash equivalents’ is that they are held for the purpose of meeting short-term cash commitments rather than for investing or other purposes. Where significant amounts are not available for use by the group, IAS 7 requires disclosure of the amount and commentary on the restriction.
Under IFRS Standards, ‘restricted cash’ is not defined and there is no specific guidance on whether restricted amounts should be included in a company’s beginning or ending cash and cash equivalent balances in the statement of cash flows. However, to meet the definition of cash and cash equivalents, among other criteria the amounts should be either held on hand, available to be withdrawn at any time without penalty or readily convertible into known amounts of cash. An overriding test for ‘cash equivalents’ is that they are held for the purpose of meeting short-term cash commitments rather than for investing or other purposes. Where significant amounts are not available for use by the group, IAS 7 requires disclosure of the amount and commentary on the restriction.
allowing companies to elect to present cash flows from operating activities using either the direct method (showing receipts from customers, payments to suppliers, etc.) or indirect method (profit or loss for the period reconciled to the total net cash flows from operating activities).
Payments made ‘soon after’ the acquisition date are classified as investing activities; we believe that three months or less is an appropriate interpretation of ‘soon after’.
The right to offset between bank accounts is considered when determining if an account is overdrawn. This assessment considers criteria in IAS 32, Financial Instruments: Presentation under IFRS Standards; and ASC 210, Balance Sheet, under US GAAP.