IASB project on cash flow statements: new approaches

The topics finally selected were: 

• the disaggregation of cash flow information in the financial statements; 
• the reporting of information about non-cash transactions in the financial statements; 
• the transparency of information about cash flow measures not specified in IFRS Accounting Standards; 
• the consistent application of requirements for classifying cash flows as operating, investing and financing; and 
• the consistent application of the definition of cash equivalents.  

Following a consultation phase, the IASB meeting of 22 July 2025 was focused on the third item: the transparency of information about cash flow measures not specified in IFRS standards. 

Discussions led the IASB to consider extending the scope of Management Performance Measures (MPMs) as defined in IFRS 18 to include cash flow measures. 

Following these initial deliberations, the IASB tentatively proposed to retain the following features of the definition of an MPM: 

• measures used outside financial statements; and  
• measures reflecting management’s view of an aspect of the financial performance of the entity as a whole. 

The IASB also tentatively proposed: 

• extending the rebuttable presumption to cash flow measures (i.e., a measure used outside the financial statements does not necessarily reflect management’s view of an aspect of the financial performance of the entity as a whole); 
• extending the disclosure objective for MPMs and specific disclosure requirements for MPMs in IFRS 18 to also apply to cash flow measures. 

Finally, an entity would not be required to present the income tax effect and the effect on non-controlling interests for each item in the reconciliation between the cash flow measure considered and the nearest IFRS subtotal.