Hedge accounting: statements of cash flows

[From Guidance on implementing IFRS 9 Financial Instruments]

How should cash flows arising from hedging instruments be classified in statements of cash flows?

Cash flows arising from hedging instruments are classified as operating, investing or financing activities, on the basis of the classification of the cash flows arising from the hedged item. While the terminology in IAS 7 has not been updated to reflect IFRS 9, the classification of cash flows arising from hedging instruments in the Continue reading

What can the Statement of Cash Flows tell you?

The statement of cash flows, as its name implies, summarizes a company’s cash flows for a period of time. The statement of cash flows explains how a company’s cash was generated during the period and how that cash was used. Even if the statement of cash flows seems to be a replacement for the income statement, the two statements have distinct objectives.

The income statement measures the results of operations for a period of time. Net income is the Continue reading

Classification of cash flows

IAS 7.10 requires an entity to analyse its cash inflows and outflows into three categories:

Operating activities

It is often assumed that this category includes only those cash flows that arise from an entity’s principal revenue producing activities.