IASB November 2007

The Board tentatively decided that the initial discussion document should describe the Board’s conceptual preference for presenting cash flow information using the direct method and explain a cost-effective way of collecting that information. The Board also tentatively decided that the document should seek input on the costs and benefits of preparing a statement of cash flows using the direct and the indirect method.

The Board tentatively decided to modify the information to be disaggregated in the reconciliation schedule (ie a reconciliation of the statement of cash flows to the statement of comprehensive income) so as to reach convergence with the FASB for the purposes of the preliminary views document. The Board also tentatively decided to separate the presentation of valuation adjustments into valuation changes that are made every period and those that are not. At a minimum, an entity would disaggregate into four components the difference between cash flows and amounts presented in comprehensive income:

• cash flows not affecting income
• accruals and systematic allocations
• recurring valuation changes
• remeasurements other than recurring valuation changes.

The Board indicated that it did not favour including information in the reconciliation schedule about unusual or infrequent events or transactions.

The Board discussed the totals and subtotals that should be required in financial statements and reached the following tentative decisions:

• A total should be presented for each category and section in each of the financial statements. Other totals and subtotals may be presented when such presentation is relevant to understanding an entity’s financial position and changes in that financial position.
• Short-term items should be distinguished from long-term items in a classified statement of financial position.
• Operating assets should be distinguished from operating liabilities in the statement of financial position.
• Other comprehensive income should be distinguished in the statement of comprehensive income and a total for comprehensive income should be presented.
• The categories and sections should be presented in the same order in each of the financial statements; however, that order would not be prescribed.