{"id":"F2015L01538","name":"AASB 107 - Statement of Cash Flows - August 2015","slug":"aasb-107-statement-of-cash-flows-august-2015","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":173088,"registerId":"commonwealth-F2015L01538-current","compilationNumber":null,"startDate":"2026-04-05","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"AASB 107 - Statement of Cash Flows - August 2015","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\ntitle: Compiled AASB 107 (Sept 2024)_01-26\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n- Compiled AASB Standard AASB 107\n\n\nStatement of Cash Flows\n\n \n\nThis compiled Standard applies to annual periods beginning on or after 1 January 2026 but before 1 January 2027.  Earlier application is permitted for annual periods beginning on or after 1 January 2014 but before 1 January 2026.  It incorporates relevant amendments made up to and including 5 September 2024.\n\nPrepared on 10 March 2026 by the staff of the Australian Accounting Standards Board.\n\nCompilation no. 6\n\nCompilation date:  31 December 2025\n\n![AASB logo with Australian crest and text identifying the Australian Government and the Australian Accounting Standards Board.](image.001.png)\n\nObtaining copies of Accounting Standards\n\nCompiled versions of Standards, original Standards and amending Standards (see Compilation Details) are available on the AASB Digital Standards Portal (standards.aasb.gov.au), which can also be accessed from aasb.gov.au.\n\n \n\nAustralian Accounting Standards Board\n\nPO Box 204\n\nCollins Street West\n\nVictoria   8007\n\nAUSTRALIA\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nWebsite: www.aasb.gov.au\n\nOther enquiries\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nCOPYRIGHT\n\n© Commonwealth of Australia 2026\n\nThis compiled AASB Standard contains IFRS Foundation copyright material.  Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source.  Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Managing Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.\n\nAll existing rights in this material are reserved outside Australia.  Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.  Further information and requests for authorisation to reproduce IFRS Foundation copyright material for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org.\n\nContents\n\nCOMPARISON WITH IAS 7\n\nACCOUNTING STANDARD\n\nAASB 107 STATEMENT OF CASH FLOWS\n\nfrom paragraph\n\nObjective\n\nScope 1\n\nBenefits of cash flow information 4\n\nDefinitions 6\n\nCash and cash equivalents 7\n\nPresentation of a statement of cash flows 10\n\nOperating activities 13\n\nInvesting activities 16\n\nFinancing activities 17\n\nReporting cash flows from operating activities 18\n\nReporting cash flows from investing and financing activities 21\n\nReporting cash flows on a net basis 22\n\nForeign currency cash flows 25\n\nInterest and dividends 31\n\nTaxes on income 35\n\nInvestments in subsidiaries, associates and joint ventures 37\n\nChanges in ownership interests in subsidiaries and other businesses 39\n\nNon-cash transactions 43\n\nCHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITES 44A\n\nSUPPLIER FINANCE ARRANGEMENTS 44f\n\nComponents of cash and cash equivalents 45\n\nOther disclosures 48\n\nCommencement of the legislative instrument\n\nWithdrawal of AASB pronouncements Aus52.2\n\nEffective date AND TRANSITION 53\n\nAppendiX\n\nA  Australian simplified disclosures for Tier 2 entities\n\n \n\nIllustrative examples\n\nA  Statement of cash flows for an entity other than a financial institution\n\nB  Statement of cash flows for a financial institution\n\nC  Reconciliation of liabilities arising from financing activities\n\nCOMPILATION DETAILS\n\nDeleted IAS 7 text\n\n \n\n \n\navailable on the AASB STANDARDS PORTAL\n\nBasis for Conclusions on IAS 7\n\n \n\nAustralian Accounting Standard AASB 107 Statement of Cash Flows (as amended) is set out in paragraphs 1–65 and Appendix A.  All the paragraphs have equal authority.  Paragraphs in bold type state the main principles.  AASB 107 is to be read in the context of other Australian Accounting Standards, including AASB 1048 Interpretation of Standards, which identifies the Australian Accounting Interpretations, and AASB 1057 Application of Australian Accounting Standards.  In the absence of explicit guidance, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies.\n\nComparison with IAS 7\n\nAASB 107 Statement of Cash Flows as amended incorporates IAS 7 Statement of Cash Flows as issued and amended by the International Accounting Standards Board (IASB).  Australian‑specific paragraphs (which are not included in IAS 7) are identified with the prefix “Aus”. Paragraphs that apply only to not-for-profit entities begin by identifying their limited applicability.\n\nTier 1\n\nFor-profit entities complying with AASB 107 also comply with IAS 7.\n\nNot-for-profit entities’ compliance with IAS 7 will depend on whether any “Aus” paragraphs that specifically apply to not-for-profit entities provide additional guidance or contain applicable requirements that are inconsistent with IAS 7.\n\nAASB 1053 Application of Tiers of Australian Accounting Standards explains the two tiers of reporting requirements.\n\n \n\n# Accounting Standard AASB 107\n\nThe Australian Accounting Standards Board made Accounting Standard AASB 107 Statement of Cash Flows under section 334 of the Corporations Act 2001 on 7 August 2015.\n\nThis compiled version of AASB 107 applies to annual periods beginning on or after 1 January 2026 but before 1 January 2027.  It incorporates relevant amendments contained in other AASB Standards made by the AASB up to and including 5 September 2024 (see Compilation Details).\n\nAccounting Standard AASB 107\n\nStatement of Cash Flows\n\nObjective\n\nInformation about the cash flows of an entity is useful in providing users of financial statements with a basis to assess the ability of the entity to generate cash and cash equivalents and the needs of the entity to utilise those cash flows. The economic decisions that are taken by users require an evaluation of the ability of an entity to generate cash and cash equivalents and the timing and certainty of their generation.\n\nThe objective of this Standard is to require the provision of information about the historical changes in cash and cash equivalents of an entity by means of a statement of cash flows which classifies cash flows during the period from operating, investing and financing activities.\n\nScope\n\n1 An entity shall prepare a statement of cash flows in accordance with the requirements of this Standard and shall present it as an integral part of its financial statements for each period for which financial statements are presented.\n\n2 [Deleted by the AASB]\n\n3 Users of an entity’s financial statements are interested in how the entity generates and uses cash and cash equivalents. This is the case regardless of the nature of the entity’s activities and irrespective of whether cash can be viewed as the product of the entity, as may be the case with a financial institution. Entities need cash for essentially the same reasons however different their principal revenue-producing activities might be. They need cash to conduct their operations, to pay their obligations, and to provide returns to their investors.\n\nBenefits of cash flow information\n\n4 A statement of cash flows, when used in conjunction with the rest of the financial statements, provides information that enables users to evaluate the changes in net assets of an entity, its financial structure (including its liquidity and solvency) and its ability to affect the amounts and timing of cash flows in order to adapt to changing circumstances and opportunities. Cash flow information is useful in assessing the ability of the entity to generate cash and cash equivalents and enables users to develop models to assess and compare the present value of the future cash flows of different entities. It also enhances the comparability of the reporting of operating performance by different entities because it eliminates the effects of using different accounting treatments for the same transactions and events.\n\n5 Historical cash flow information is often used as an indicator of the amount, timing and certainty of future cash flows. It is also useful in checking the accuracy of past assessments of future cash flows and in examining the relationship between profitability and net cash flow and the impact of changing prices.\n\nDefinitions\n\n6 The following terms are used in this Standard with the meanings specified:\n\nCash comprises cash on hand and demand deposits.\n\nCash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.\n\nCash flows are inflows and outflows of cash and cash equivalents.\n\nOperating activities are the principal revenue-producing activities of the entity and other activities that are not investing or financing activities.\n\nInvesting activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents.\n\nFinancing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.\n\nCash and cash equivalents\n\n7 Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. For an investment to qualify as a cash equivalent it must be readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value. Therefore, an investment normally qualifies as a cash equivalent only when it has a short maturity of, say, three months or less from the date of acquisition. Equity investments are excluded from cash equivalents unless they are, in substance, cash equivalents, for example in the case of preferred shares acquired within a short period of their maturity and with a specified redemption date.\n\n8 Bank borrowings are generally considered to be financing activities. However, in some countries, bank overdrafts which are repayable on demand form an integral part of an entity’s cash management. In these circumstances, bank overdrafts are included as a component of cash and cash equivalents. A characteristic of such banking arrangements is that the bank balance often fluctuates from being positive to overdrawn.\n\n9 Cash flows exclude movements between items that constitute cash or cash equivalents because these components are part of the cash management of an entity rather than part of its operating, investing and financing activities. Cash management includes the investment of excess cash in cash equivalents.\n\nPresentation of a statement of cash flows\n\n10 The statement of cash flows shall report cash flows during the period classified by operating, investing and financing activities.\n\n11 An entity presents its cash flows from operating, investing and financing activities in a manner which is most appropriate to its business. Classification by activity provides information that allows users to assess the impact of those activities on the financial position of the entity and the amount of its cash and cash equivalents. This information may also be used to evaluate the relationships among those activities.\n\n12 A single transaction may include cash flows that are classified differently. For example, when the cash repayment of a loan includes both interest and capital, the interest element may be classified as an operating activity and the capital element is classified as a financing activity.\n\nOperating activities\n\n13 The amount of cash flows arising from operating activities is a key indicator of the extent to which the operations of the entity have generated sufficient cash flows to repay loans, maintain the operating capability of the entity, pay dividends and make new investments without recourse to external sources of financing. Information about the specific components of historical operating cash flows is useful, in conjunction with other information, in forecasting future operating cash flows.\n\n14 Cash flows from operating activities are primarily derived from the principal revenue-producing activities of the entity. Therefore, they generally result from the transactions and other events that enter into the determination of profit or loss. Examples of cash flows from operating activities are:\n\n(a) cash receipts from the sale of goods and the rendering of services;\n\n(b) cash receipts from royalties, fees, commissions and other revenue;\n\n(c) cash payments to suppliers for goods and services;\n\n(d) cash payments to and on behalf of employees;\n\n(e) [deleted]\n\n(f) cash payments or refunds of income taxes unless they can be specifically identified with financing and investing activities; and\n\n(g) cash receipts and payments from contracts held for dealing or trading purposes.\n\nSome transactions, such as the sale of an item of plant, may give rise to a gain or loss that is included in recognised profit or loss. The cash flows relating to such transactions are cash flows from investing activities. However, cash payments to manufacture or acquire assets held for rental to others and subsequently held for sale as described in paragraph 68A of AASB 116 Property, Plant and Equipment are cash flows from operating activities. The cash receipts from rents and subsequent sales of such assets are also cash flows from operating activities.\n\n15 An entity may hold securities and loans for dealing or trading purposes, in which case they are similar to inventory acquired specifically for resale. Therefore, cash flows arising from the purchase and sale of dealing or trading securities are classified as operating activities. Similarly, cash advances and loans made by financial institutions are usually classified as operating activities since they relate to the main revenue-producing activity of that entity.\n\nInvesting activities\n\n16 The separate disclosure of cash flows arising from investing activities is important because the cash flows represent the extent to which expenditures have been made for resources intended to generate future income and cash flows. Only expenditures that result in a recognised asset in the statement of financial position are eligible for classification as investing activities. Examples of cash flows arising from investing activities are:\n\n(a) cash payments to acquire property, plant and equipment, intangibles and other long-term assets. These payments include those relating to capitalised development costs and self-constructed property, plant and equipment;\n\n(b) cash receipts from sales of property, plant and equipment, intangibles and other long-term assets;\n\n(c) cash payments to acquire equity or debt instruments of other entities and interests in joint ventures (other than payments for those instruments considered to be cash equivalents or those held for dealing or trading purposes);\n\n(d) cash receipts from sales of equity or debt instruments of other entities and interests in joint ventures (other than receipts for those instruments considered to be cash equivalents and those held for dealing or trading purposes);\n\n(e) cash advances and loans made to other parties (other than advances and loans made by a financial institution);\n\n(f) cash receipts from the repayment of advances and loans made to other parties (other than advances and loans of a financial institution);\n\n(g) cash payments for futures contracts, forward contracts, option contracts and swap contracts except when the contracts are held for dealing or trading purposes, or the payments are classified as financing activities; and\n\n(h) cash receipts from futures contracts, forward contracts, option contracts and swap contracts except when the contracts are held for dealing or trading purposes, or the receipts are classified as financing activities.\n\nWhen a contract is accounted for as a hedge of an identifiable position the cash flows of the contract are classified in the same manner as the cash flows of the position being hedged.\n\nFinancing activities\n\n17 The separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of capital to the entity. Examples of cash flows arising from financing activities are:\n\n(a) cash proceeds from issuing shares or other equity instruments;\n\n(b) cash payments to owners to acquire or redeem the entity’s shares;\n\n(c) cash proceeds from issuing debentures, loans, notes, bonds, mortgages and other short-term or long-term borrowings;\n\n(d) cash repayments of amounts borrowed; and\n\n(e) cash payments by a lessee for the reduction of the outstanding liability relating to a lease.\n\nReporting cash flows from operating activities\n\n18 An entity shall report cash flows from operating activities using either:\n\n(a) the direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed; or\n\n(b) the indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows.\n\n19 Entities are encouraged to report cash flows from operating activities using the direct method. The direct method provides information which may be useful in estimating future cash flows and which is not available under the indirect method. Under the direct method, information about major classes of gross cash receipts and gross cash payments may be obtained either:\n\n(a) from the accounting records of the entity; or\n\n(b) by adjusting sales, cost of sales (interest and similar income and interest expense and similar charges for a financial institution) and other items in the statement of comprehensive income for:\n\n(i) changes during the period in inventories and operating receivables and payables;\n\n(ii) other non-cash items; and\n\n(iii) other items for which the cash effects are investing or financing cash flows.\n\n20 Under the indirect method, the net cash flow from operating activities is determined by adjusting profit or loss for the effects of:\n\n(a) changes during the period in inventories and operating receivables and payables;\n\n(b) non-cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and losses, and undistributed profits of associates; and\n\n(c) all other items for which the cash effects are investing or financing cash flows.\n\nAlternatively, the net cash flow from operating activities may be presented under the indirect method by showing the revenues and expenses disclosed in the statement of comprehensive income and the changes during the period in inventories and operating receivables and payables.\n\nAus20.1 [Deleted by the AASB]\n\nAus20.2 Not-for-profit entities that use the direct method and that highlight the net cost of services in their statement of comprehensive income for the reporting period shall disclose in the complete set of financial statements a reconciliation of cash flows arising from operating activities to net cost of services as reported in the statement of comprehensive income.\n\nReporting cash flows from investing and financing activities\n\n21 An entity shall report separately major classes of gross cash receipts and gross cash payments arising from investing and financing activities, except to the extent that cash flows described in paragraphs 22 and 24 are reported on a net basis.\n\nReporting cash flows on a net basis\n\n22 Cash flows arising from the following operating, investing or financing activities may be reported on a net basis:\n\n(a) cash receipts and payments on behalf of customers when the cash flows reflect the activities of the customer rather than those of the entity; and\n\n(b) cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are short.\n\n23 Examples of cash receipts and payments referred to in paragraph 22(a) are:\n\n(a) the acceptance and repayment of demand deposits of a bank;\n\n(b) funds held for customers by an investment entity; and\n\n(c) rents collected on behalf of, and paid over to, the owners of properties.\n\n23A Examples of cash receipts and payments referred to in paragraph 22(b) are advances made for, and the repayment of:\n\n(a) principal amounts relating to credit card customers;\n\n(b) the purchase and sale of investments; and\n\n(c) other short-term borrowings, for example, those which have a maturity period of three months or less.\n\n24 Cash flows arising from each of the following activities of a financial institution may be reported on a net basis:\n\n(a) cash receipts and payments for the acceptance and repayment of deposits with a fixed maturity date;\n\n(b) the placement of deposits with and withdrawal of deposits from other financial institutions; and\n\n(c) cash advances and loans made to customers and the repayment of those advances and loans.\n\nForeign currency cash flows\n\n25 Cash flows arising from transactions in a foreign currency shall be recorded in an entity’s functional currency by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the cash flow.\n\n26 The cash flows of a foreign subsidiary shall be translated at the exchange rates between the functional currency and the foreign currency at the dates of the cash flows.\n\n27 Cash flows denominated in a foreign currency are reported in a manner consistent with AASB 121 The Effects of Changes in Foreign Exchange Rates. This permits the use of an exchange rate that approximates the actual rate. For example, a weighted average exchange rate for a period may be used for recording foreign currency transactions or the translation of the cash flows of a foreign subsidiary. However, AASB 121 does not permit use of the exchange rate at the end of the reporting period when translating the cash flows of a foreign subsidiary.\n\n28 Unrealised gains and losses arising from changes in foreign currency exchange rates are not cash flows. However, the effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency is reported in the statement of cash flows in order to reconcile cash and cash equivalents at the beginning and the end of the period. This amount is presented separately from cash flows from operating, investing and financing activities and includes the differences, if any, had those cash flows been reported at end of period exchange rates.\n\n29 [Deleted]\n\n30 [Deleted]\n\nInterest and dividends\n\n31 Cash flows from interest and dividends received and paid shall each be disclosed separately. Each shall be classified in a consistent manner from period to period as either operating, investing or financing activities.\n\n32 The total amount of interest paid during a period is disclosed in the statement of cash flows whether it has been recognised as an expense in profit or loss or capitalised in accordance with AASB 123 Borrowing Costs.\n\n33 Interest paid and interest and dividends received are usually classified as operating cash flows for a financial institution. However, there is no consensus on the classification of these cash flows for other entities. Interest paid and interest and dividends received may be classified as operating cash flows because they enter into the determination of profit or loss. Alternatively, interest paid and interest and dividends received may be classified as financing cash flows and investing cash flows respectively, because they are costs of obtaining financial resources or returns on investments.\n\n34 Dividends paid may be classified as a financing cash flow because they are a cost of obtaining financial resources. Alternatively, dividends paid may be classified as a component of cash flows from operating activities in order to assist users to determine the ability of an entity to pay dividends out of operating cash flows.\n\nTaxes on income\n\n35 Cash flows arising from taxes on income shall be separately disclosed and shall be classified as cash flows from operating activities unless they can be specifically identified with financing and investing activities.\n\n36 Taxes on income arise on transactions that give rise to cash flows that are classified as operating, investing or financing activities in a statement of cash flows. While tax expense may be readily identifiable with investing or financing activities, the related tax cash flows are often impracticable to identify and may arise in a different period from the cash flows of the underlying transaction. Therefore, taxes paid are usually classified as cash flows from operating activities. However, when it is practicable to identify the tax cash flow with an individual transaction that gives rise to cash flows that are classified as investing or financing activities the tax cash flow is classified as an investing or financing activity as appropriate. When tax cash flows are allocated over more than one class of activity, the total amount of taxes paid is disclosed.\n\nInvestments in subsidiaries, associates and joint ventures\n\n37 When accounting for an investment in an associate, a joint venture or a subsidiary accounted for by use of the equity method or at cost, an investor restricts its reporting in the statement of cash flows to the cash flows between itself and the investee, for example, to dividends and advances.\n\n38 An entity that reports its interest in an associate or a joint venture using the equity method includes in its statement of cash flows the cash flows in respect of its investments in the associate or joint venture, and distributions and other payments or receipts between it and the associate or joint venture.\n\nChanges in ownership interests in subsidiaries and other businesses\n\n39 The aggregate cash flows arising from obtaining or losing control of subsidiaries or other businesses shall be presented separately and classified as investing activities.\n\n40 An entity shall disclose, in aggregate, in respect of both obtaining and losing control of subsidiaries or other businesses during the period each of the following:\n\n(a) the total consideration paid or received;\n\n(b) the portion of the consideration consisting of cash and cash equivalents;\n\n(c) the amount of cash and cash equivalents in the subsidiaries or other businesses over which control is obtained or lost; and\n\n(d) the amount of the assets and liabilities other than cash or cash equivalents in the subsidiaries or other businesses over which control is obtained or lost, summarised by each major category.\n\n40A An investment entity, as defined in AASB 10 Consolidated Financial Statements, need not apply paragraphs 40(c) or 40(d) to an investment in a subsidiary that is required to be measured at fair value through profit or loss.\n\n41 The separate presentation of the cash flow effects of obtaining or losing control of subsidiaries or other businesses as single line items, together with the separate disclosure of the amounts of assets and liabilities acquired or disposed of, helps to distinguish those cash flows from the cash flows arising from the other operating, investing and financing activities. The cash flow effects of losing control are not deducted from those of obtaining control.\n\n42 The aggregate amount of the cash paid or received as consideration for obtaining or losing control of subsidiaries or other businesses is reported in the statement of cash flows net of cash and cash equivalents acquired or disposed of as part of such transactions, events or changes in circumstances.\n\n42A Cash flows arising from changes in ownership interests in a subsidiary that do not result in a loss of control shall be classified as cash flows from financing activities, unless the subsidiary is held by an investment entity, as defined in AASB 10, and is required to be measured at fair value through profit or loss.\n\n42B Changes in ownership interests in a subsidiary that do not result in a loss of control, such as the subsequent purchase or sale by a parent of a subsidiary’s equity instruments, are accounted for as equity transactions (see AASB 10), unless the subsidiary is held by an investment entity and is required to be measured at fair value through profit or loss. Accordingly, the resulting cash flows are classified in the same way as other transactions with owners described in paragraph 17.\n\nNon-cash transactions\n\n43 Investing and financing transactions that do not require the use of cash or cash equivalents shall be excluded from a statement of cash flows. Such transactions shall be disclosed elsewhere in the financial statements in a way that provides all the relevant information about these investing and financing activities.\n\n44 Many investing and financing activities do not have a direct impact on current cash flows although they do affect the capital and asset structure of an entity. The exclusion of non-cash transactions from the statement of cash flows is consistent with the objective of a statement of cash flows as these items do not involve cash flows in the current period. Examples of non-cash transactions are:\n\n(a) the acquisition of assets either by assuming directly related liabilities or by means of a lease;\n\n(b) the acquisition of an entity by means of an equity issue; and\n\n(c) the conversion of debt to equity.\n\nChanges in liabilities arising from financing activities\n\n44A An entity shall provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.\n\n44B To the extent necessary to satisfy the requirement in paragraph 44A, an entity shall disclose the following changes in liabilities arising from financing activities:\n\n(a) changes from financing cash flows;\n\n(b) changes arising from obtaining or losing control of subsidiaries or other businesses;\n\n(c) the effect of changes in foreign exchange rates;\n\n(d) changes in fair values; and\n\n(e) other changes.\n\n44C Liabilities arising from financing activities are liabilities for which cash flows were, or future cash flows will be, classified in the statement of cash flows as cash flows from financing activities. In addition, the disclosure requirement in paragraph 44A also applies to changes in financial assets (for example, assets that hedge liabilities arising from financing activities) if cash flows from those financial assets were, or future cash flows will be, included in cash flows from financing activities.\n\n44D One way to fulfil the disclosure requirement in paragraph 44A is by providing a reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities, including the changes identified in paragraph 44B. Where an entity discloses such a reconciliation, it shall provide sufficient information to enable users of the financial statements to link items included in the reconciliation to the statement of financial position and the statement of cash flows.\n\n44E If an entity provides the disclosure required by paragraph 44A in combination with disclosures of changes in other assets and liabilities, it shall disclose the changes in liabilities arising from financing activities separately from changes in those other assets and liabilities.\n\nSupplier finance arrangements\n\n44F An entity shall disclose information about its supplier finance arrangements (as described in paragraph 44G) that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk.\n\n44G Supplier finance arrangements are characterised by one or more finance providers offering to pay amounts an entity owes its suppliers and the entity agreeing to pay according to the terms and conditions of the arrangements at the same date as, or a date later than, suppliers are paid. These arrangements provide the entity with extended payment terms, or the entity’s suppliers with early payment terms, compared to the related invoice payment due date. Supplier finance arrangements are often referred to as supply chain finance, payables finance or reverse factoring arrangements. Arrangements that are solely credit enhancements for the entity (for example, financial guarantees including letters of credit used as guarantees) or instruments used by the entity to settle directly with a supplier the amounts owed (for example, credit cards) are not supplier finance arrangements.\n\n44H To meet the objectives in paragraph 44F, an entity shall disclose in aggregate for its supplier finance arrangements:\n\n(a) the terms and conditions of the arrangements (for example, extended payment terms and security or guarantees provided). However, an entity shall disclose separately the terms and conditions of arrangements that have dissimilar terms and conditions.\n\n(b) as at the beginning and end of the reporting period:\n\n(i) the carrying amounts, and associated line items presented in the entity’s statement of financial position, of the financial liabilities that are part of a supplier finance arrangement.\n\n(ii) the carrying amounts, and associated line items, of the financial liabilities disclosed under (i) for which suppliers have already received payment from the finance providers.\n\n(iii) the range of payment due dates (for example, 30–40 days after the invoice date) for both the financial liabilities disclosed under (i) and comparable trade payables that are not part of a supplier finance arrangement. Comparable trade payables are, for example, trade payables of the entity within the same line of business or jurisdiction as the financial liabilities disclosed under (i). If ranges of payment due dates are wide, an entity shall disclose explanatory information about those ranges or disclose additional ranges (for example, stratified ranges).\n\n(c) the type and effect of non-cash changes in the carrying amounts of the financial liabilities disclosed under (b)(i). Examples of non-cash changes include the effect of business combinations, exchange differences or other transactions that do not require the use of cash or cash equivalents (see paragraph 43).\n\nComponents of cash and cash equivalents\n\n45 An entity shall disclose the components of cash and cash equivalents and shall present a reconciliation of the amounts in its statement of cash flows with the equivalent items reported in the statement of financial position.\n\n46 In view of the variety of cash management practices and banking arrangements around the world and in order to comply with AASB 101 Presentation of Financial Statements, an entity discloses the policy which it adopts in determining the composition of cash and cash equivalents.\n\n47 The effect of any change in the policy for determining components of cash and cash equivalents, for example, a change in the classification of financial instruments previously considered to be part of an entity’s investment portfolio, is reported in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.\n\nOther disclosures\n\n48 An entity shall disclose, together with a commentary by management, the amount of significant cash and cash equivalent balances held by the entity that are not available for use by the group.\n\n49 There are various circumstances in which cash and cash equivalent balances held by an entity are not available for use by the group. Examples include cash and cash equivalent balances held by a subsidiary that operates in a country where exchange controls or other legal restrictions apply when the balances are not available for general use by the parent or other subsidiaries.\n\n50 Additional information may be relevant to users in understanding the financial position and liquidity of an entity. Disclosure of this information, together with a commentary by management, is encouraged and may include:\n\n(a) the amount of undrawn borrowing facilities that may be available for future operating activities and to settle capital commitments, indicating any restrictions on the use of these facilities;\n\n(b) [deleted]\n\n(c) the aggregate amount of cash flows that represent increases in operating capacity separately from those cash flows that are required to maintain operating capacity; and\n\n(d) the amount of the cash flows arising from the operating, investing and financing activities of each reportable segment (see AASB 8 Operating Segments).\n\n51 The separate disclosure of cash flows that represent increases in operating capacity and cash flows that are required to maintain operating capacity is useful in enabling the user to determine whether the entity is investing adequately in the maintenance of its operating capacity. An entity that does not invest adequately in the maintenance of its operating capacity may be prejudicing future profitability for the sake of current liquidity and distributions to owners.\n\n52 The disclosure of segmental cash flows enables users to obtain a better understanding of the relationship between the cash flows of the business as a whole and those of its component parts and the availability and variability of segmental cash flows.\n\nCommencement of the legislative instrument\n\nAus52.1 [Repealed]\n\nWithdrawal of AASB pronouncements\n\nAus52.2 This Standard repeals AASB 107 Statement of Cash Flows issued in July 2004.  Despite the repeal, after the time this Standard starts to apply under section 334 of the Corporations Act (either generally or in relation to an individual entity), the repealed Standard continues to apply in relation to any period ending before that time as if the repeal had not occurred.\n\n[Note: When this Standard applies under section 334 of the Corporations Act (either generally or in relation to an individual entity), it supersedes the application of the repealed Standard.]\n\nEffective date and transition\n\n53 This Standard becomes operative for financial statements covering periods beginning on or after 1 January 2016. Earlier application is permitted for periods beginning on or after 1 January 2014 but before 1 January 2016.\n\n54–  58 [Deleted by the AASB]\n\n59 AASB 16 Leases, issued in February 2016, amended paragraphs 17 and 44. An entity shall apply those amendments when it applies AASB 16.\n\n60 AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107, issued in March 2016, added paragraphs 44A–44E. An entity shall apply those amendments for annual periods beginning on or after 1 January 2017. Earlier application is permitted. When the entity first applies those amendments, it is not required to provide comparative information for preceding periods.\n\n61 AASB 17 Insurance Contracts, issued in July 2017, amended paragraph 14. An entity shall apply that amendment when it applies AASB 17.\n\n62 AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements, issued in June 2023, added paragraphs 44F–44H. An entity shall apply those amendments for annual reporting periods beginning on or after 1 January 2024. Earlier application is permitted. If an entity applies those amendments for an earlier period, it shall disclose that fact.\n\n63 In applying AASB 2023-1, an entity is not required to disclose:\n\n(a) comparative information for any reporting periods presented before the beginning of the annual reporting period in which the entity first applies those amendments.\n\n(b) the information otherwise required by paragraph 44H(b)(ii)–(iii) as at the beginning of the annual reporting period in which the entity first applies those amendments.\n\n(c) the information otherwise required by paragraphs 44F–44H for any interim period presented within the annual reporting period in which the entity first applies those amendments.\n\n65 AASB 2024-3 Amendments to Australian Accounting Standards – Annual Improvements Volume 11, issued in September 2024, amended paragraph 37. An entity shall apply that amendment for annual reporting periods beginning on or after 1 January 2026. Earlier application is permitted. If an entity applies that amendment for an earlier period, it shall disclose that fact.\n\n \n\nAppendix A  Australian simplified disclosures for Tier 2 entities\n\nThis appendix is an integral part of the Standard.\n\nAusA1 This Standard does not apply to entities preparing general purpose financial statements that apply AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities.\n\n \n\nIllustrative examples\n\nThese illustrative examples accompany, but are not part of, AASB 107.\n\nA  Statement of cash flows for an entity other than a financial institution\n\n1 The examples show only current period amounts. Corresponding amounts for the preceding period are required to be presented in accordance with AASB 101 Presentation of Financial Statements.\n\n2 Information from the statement of comprehensive income and statement of financial position is provided to show how the statements of cash flows under the direct method and indirect method have been derived. Neither the statement of comprehensive income nor the statement of financial position is presented in conformity with the disclosure and presentation requirements of other Standards.\n\n3 The following additional information is also relevant for the preparation of the statements of cash flows:\n\n• all of the shares of a subsidiary were acquired for 590. The fair values of assets acquired and liabilities assumed were as follows:\n\n \n\n|  | Inventories | 100 |\n| --- | --- | --- |\n|  | Accounts receivable | 100 |\n|  | Cash | 40 |\n|  | Property, plant and equipment | 650 |\n|  | Trade payables | 100 |\n|  | Long-term debt | 200 |\n\n\n \n\n• 250 was raised from the issue of share capital and a further 250 was raised from long-term borrowings.\n\n• interest expense was 400, of which 170 was paid during the period. Also, 100 relating to interest expense of the prior period was paid during the period.\n\n• dividends paid were 1,200.\n\n• the liability for tax at the beginning and end of the period was 1,000 and 400 respectively. During the period, a further 200 tax was provided for. Withholding tax on dividends received amounted to 100.\n\n• during the period, the group acquired property, plant and equipment and right-of-use assets relating to property, plant and equipment with an aggregate cost of 1,250, of which 900 related to right-of-use assets. Cash payments of 350 were made to purchase property, plant and equipment.\n\n• plant with original cost of 80 and accumulated depreciation of 60 was sold for 20.\n\n• accounts receivable as at the end of 20X2 include 100 of interest receivable.\n\n \n\n- Consolidated statement of comprehensive income for the period ended 20X2(a)\n- Sales 30,650\n- Cost of sales (26,000)\n- Gross profit 4,650\n- Depreciation (450)\n- Administrative and selling expenses (910)\n- Interest expense (400)\n- Investment income 500\n- Foreign exchange loss (40)\n- Profit before taxation 3,350\n- Taxes on income (300)\n- Profit 3,050\n- (a) The entity did not recognise any components of other comprehensive income in the period ended 20X2\n\n\n \n\n- Consolidated statement of financial position as at end of 20X2\n- 20X2 20X1\n- Assets\n- Cash and cash equivalents 230 160\n- Accounts receivable 1,900 1,200\n- Inventory 1,000 1,950\n- Portfolio investments 2,500 2,500\n- Property, plant and equipment at cost 3,730 1,910\n- Accumulated depreciation (1,450) (1,060)\n- Property, plant and equipment net 2,280 850\n- Total assets 7,910 6,660\n- Liabilities\n- Trade payables 250 1,890\n- Interest payable 230 100\n- Income taxes payable 400 1,000\n- Long-term debt 2,300 1,040\n- Total liabilities 3,180 4,030\n- Shareholders’ equity\n- Share capital 1,500 1,250\n- Retained earnings 3,230 1,380\n- Total shareholders’ equity 4,730 2,630\n- Total liabilities and shareholders’ equity 7,910 6,660\n\n\n \n\n- Direct method statement of cash flows (paragraph 18(a))\n- 20X2\n- Cash flows from operating activities\n- Cash receipts from customers 30,150\n- Cash paid to suppliers and employees (27,600)\n- Cash generated from operations 2,550\n- Interest paid (270)\n- Income taxes paid (900)\n- Net cash from operating activities 1,380\n- Cash flows from investing activities\n- Acquisition of subsidiary X, net of cash acquired (Note A) (550)\n- Purchase of property, plant and equipment (Note B) (350)\n- Proceeds from sale of equipment 20\n- Interest received 200\n- Dividends received 200\n- Net cash used in investing activities (480)\n- Cash flows from financing activities\n- Proceeds from issue of share capital 250\n- Proceeds from long-term borrowings 250\n- Payment of lease liabilities (90)\n- Dividends paid(a) (1,200)\n- Net cash used in financing activities (790)\n- Net increase in cash and cash equivalents 110\n- Cash and cash equivalents at beginning of period (Note C) 120\n- Cash and cash equivalents at end of period (Note C) 230\n- (a) This could also be shown as an operating cash flow.\n\n\n \n\n- Indirect method statement of cash flows (paragraph 18(b))\n- 20X2\n- Cash flows from operating activities\n- Profit before taxation 3,350\n- Adjustments for:\n- Depreciation 450\n- Foreign exchange loss 40\n- Investment income (500)\n- Interest expense 400\n- 3,740\n- Increase in trade and other receivables (500)\n- Decrease in inventories 1,050\n- Decrease in trade payables (1,740)\n- Cash generated from operations 2,550\n- Interest paid (270)\n- Income taxes paid (900)\n- Net cash from operating activities 1,380\n- Cash flows from investing activities\n- Acquisition of subsidiary X net of cash acquired (Note A) (550)\n- Purchase of property, plant and equipment (Note B) (350)\n- Proceeds from sale of equipment 20\n- Interest received 200\n- Dividends received 200\n- Net cash used in investing activities (480)\n- Cash flows from financing activities\n- Proceeds from issue of share capital 250\n- Proceeds from long-term borrowings 250\n- Payment of lease liabilities (90)\n- Dividends paid(a) (1,200)\n- Net cash used in financing activities (790)\n- Net increase in cash and cash equivalents 110\n- Cash and cash equivalents at beginning of period (Note C) 120\n- Cash and cash equivalents at end of period (Note C) 230\n- (a) This could also be shown as an operating cash flow.\n\n\nNotes to the statement of cash flows (direct method and indirect method)\n\nA. Obtaining control of subsidiary\n\nDuring the period the Group obtained control of subsidiary X. The fair values of assets acquired and liabilities assumed were as follows:\n\n \n\n| Cash | 40 |\n| --- | --- |\n| Inventories | 100 |\n| Accounts receivable | 100 |\n| Property, plant and equipment | 650 |\n| Trade payables | (100) |\n| Long-term debt | (200) |\n| Total purchase price paid in cash | 590 |\n| Less: Cash of subsidiary X acquired | (40) |\n| Cash paid to obtain control net of cash acquired | 550 |\n\n\nB. Property, plant and equipment\n\nDuring the period, the Group acquired property, plant and equipment and right-of-use assets relating to property, plant and equipment with an aggregate cost of 1,250, of which 900 related to right-of-use assets. Cash payments of 350 were made to purchase property, plant and equipment.\n\nC. Cash and cash equivalents\n\nCash and cash equivalents consist of cash on hand and balances with banks, and investments in money market instruments. Cash and cash equivalents included in the statement of cash flows comprise the following amounts in the statement of financial position:\n\n \n\n|  | 20X2 |  | 20X1 |\n| --- | --- | --- | --- |\n| Cash on hand and balances with banks | 40 |  | 25 |\n| Short-term investments | 190 |  | 135 |\n| Cash and cash equivalents as previously reported | 230 |  | 160 |\n| Effect of exchange rate changes | – |  | (40) |\n| Cash and cash equivalents as restated | 230 |  | 120 |\n\n\n \n\nCash and cash equivalents at the end of the period include deposits with banks of 100 held by a subsidiary which are not freely remissible to the holding company because of currency exchange restrictions.\n\nThe Group has undrawn borrowing facilities of 2,000 of which 700 may be used only for future expansion.\n\nD. Segment information\n\n- Segment A Segment B Total\n- Cash flows from:\n- Operating activities 1,520 (140) 1,380\n- Investing activities (640) 160 (480)\n- Financing activities (570) (220) (790)\n- 310 (200) 110\n\n\nE. Reconciliation of liabilities arising from financing activities\n\n- 20X1 Cash flows Non-cash changes 20X2\n- Acquisition New leases\n- Long-term borrowings 1,040 250 200 – 1,490\n- Lease liabilities – (90) – 900 810\n- Long-term debt 1,040 160 200 900 2,300\n\n\nAlternative presentation (indirect method)\n\nAs an alternative, in an indirect method statement of cash flows, operating profit before working capital changes is sometimes presented as follows:\n\n \n\n| Revenues excluding investment income | 30,650 |  |  |\n| --- | --- | --- | --- |\n| Operating expense excluding depreciation | (26,910) |  |  |\n|  |  |  |  |\n| Operating profit before working capital changes |  |  | 3,740 |\n|  |  |  |  |\n\n\nB  Statement of cash flows for a financial institution\n\n1 The example shows only current period amounts. Comparative amounts for the preceding period are required to be presented in accordance with AASB 101 Presentation of Financial Statements.\n\n2 The example is presented using the direct method.\n\n \n\n- 20X2\n- Cash flows from operating activities\n- Interest and commission receipts 28,447\n- Interest payments (23,463)\n- Recoveries on loans previously written off 237\n- Cash payments to employees and suppliers (997)\n- 4,224\n- (Increase) decrease in operating assets:\n- Short-term funds (650)\n- Deposits held for regulatory or monetary control purposes 234\n- Funds advanced to customers (288)\n- Net increase in credit card receivables (360)\n- Other short-term negotiable securities (120)\n- Increase (decrease) in operating liabilities:\n- Deposits from customers 600\n- Negotiable certificates of deposit (200)\n- Net cash from operating activities before income tax 3,440\n- Income taxes paid (100)\n- Net cash from operating activities 3,340\n- Cash flows from investing activities\n- Disposal of subsidiary Y 50\n- Dividends received 200\n- Interest received 300\n- Proceeds from sales of non-dealing securities 1,200\n- Purchase of non-dealing securities (600)\n- Purchase of property, plant and equipment (500)\n- Net cash from investing activities 650\n- Cash flows from financing activities\n- Issue of loan capital 1,000\n- Issue of preference shares by subsidiary undertaking 800\n- Repayment of long-term borrowings (200)\n- Net decrease in other borrowings (1,000)\n- Dividends paid (400)\n- Net cash from financing activities 200\n- Effects of exchange rate changes on cash and cash equivalents 600\n- Net increase in cash and cash equivalents 4,790\n- Cash and cash equivalents at beginning of period 4,050\n- Cash and cash equivalents at end of period 8,840\n\n\nC  Reconciliation of liabilities arising from financing activities\n\n1 This example illustrates one possible way of providing the disclosures required by paragraphs 44A–44E.\n\n2 The example shows only current period amounts. Corresponding amounts for the preceding period are required to be presented in accordance with AASB 101 Presentation of Financial Statements.\n\n \n\n- 20X1 Cash flows Non-cash changes 20X2\n- Acquisition Foreign exchange movement Fair value changes\n- Long-term borrowings 22,000 (1,000) – – – 21,000\n- Short-term borrowings 10,000 (500) – 200 – 9,700\n- Lease liabilities 4,000 (800) 300 – – 3,500\n- Assets held to hedge long-term borrowings (675) 150 – – (25) (550)\n- Total liabilities from financing activities 35,325 (2,150) 300 200 (25) 33,650\n\n\n \n\n \n\nCompilation details  Accounting Standard AASB 107 Statement of Cash Flows (as amended)\n\nCompilation details are not part of AASB 107.\n\nThis compiled Standard applies to annual periods beginning on or after 1 January 2026 but before 1 January 2027.  It takes into account amendments up to and including 5 September 2024 and was prepared on 10 March 2026 by the staff of the Australian Accounting Standards Board (AASB).\n\nThis compilation is not a separate Accounting Standard made by the AASB.  Instead, it is a representation of AASB 107 (August 2015) as amended by other Accounting Standards, which are listed in the table below.\n\nTable of Standards\n\n| Standard | Date made | FRL identifier | Commence-ment date | Effective date  (annual periods   … on or after …) | Application, saving or transitional provisions |\n| --- | --- | --- | --- | --- | --- |\n| AASB 107 | 7 Aug 2015 | F2015L01538 | 31 Dec 2015 | (beginning) 1 Jan 2016 | see (a) below |\n| AASB 16 | 23 Feb 2016 | F2016L00233 | 31 Dec 2018 | (beginning) 1 Jan 2019 | see (b) below |\n| AASB 2016-2 | 23 Mar 2016 | F2016L00395 | 31 Dec 2016 | (beginning) 1 Jan 2017 | see (c) below |\n| AASB 17 | 19 Jul 2017 | F2017L01184 | 31 Dec 2022 | (beginning) 1 Jan 2023 | see (d) below |\n| AASB 1060 | 6 Mar 2020 | F2020L00288 | 30 Jun 2021 | (beginning) 1 Jul 2021 | see (e) below |\n| AASB 2023-1 | 22 Jun 2023 | F2023L00953 | 31 Dec 2023 | (beginning) 1 Jan 2024 | see (f) below |\n| AASB 18 | 7 Jun 2024 | F2024L00708 | 31 Dec 2026 | FP (beginning) 1 Jan 2027<br>NFP & superannuation entities (beginning) 1 Jan 2028 | not compiled* |\n| AASB 2024-3 | 5 Sep 2024 | F2024L01194 | 31 Dec 2025 | (beginning) 1 Jan 2026 | see (g) below |\n\n\n* The amendments made by this Standard are not included in this compilation, which presents the principal Standard as applicable to annual periods beginning on or after 1 January 2026 but before 1 January 2027.\n\n1.            Entities may elect to apply this Standard to periods beginning on or after 1 January 2014 but before 1 January 2016.\n2.            Entities may elect to apply this Standard to periods beginning before 1 January 2019, provided that AASB 15 Revenue from Contracts with Customers is also applied to the same period.\n3.            Entities may elect to apply this Standard to annual periods beginning before 1 January 2017.\n4.            Entities may elect to apply this Standard to annual periods beginning before 1 January 2023, provided that AASB 9 Financial Instruments is also applied on or before the date of initial application of AASB 17. (AASB 17 was amended prior to its mandatory application by various amending Standards, including AASB 2022-8 Amendments to Australian Accounting Standards – Insurance Contracts: Consequential Amendments, made by the AASB on 15 December 2022.)\n5.            Entities may elect to apply this Standard to annual periods beginning before 1 January 2021.\n6.             Entities may elect to apply this Standard to annual periods beginning before 1 January 2024.\n7.            Entities may elect to apply the amendments in this Standard to individual Standards to annual periods beginning before 1 January 2026.\n\n\nTable of amendments to Standard\n\n| Paragraph affected | How affected | By … [paragraph/page] |\n| --- | --- | --- |\n| 14 | amended | AASB 17 [page 76] |\n| 17 | amended | AASB 16 [page 47] |\n| 37 | amended | AASB 2024-3 [page 9] |\n| 44 | amended | AASB 16 [page 47] |\n| 44A-44E (and preceding heading) | added | AASB 2016-2 [page 5] |\n| 44F-44H (and preceding heading) | added | AASB 2023-1 [page 5] |\n| Aus52.1 | repealed | Legislation Act 2003, s. 48D |\n| 53 (preceding heading) | amended | AASB 2023-1 [page 6] |\n| Aus58.1 | renumbered | AASB 16 [page 47] |\n| Aus58.2 | renumbered | AASB 16 [page 47] |\n| 59 | added | AASB 16 [page 47] |\n| 60 | added | AASB 2016-2 [page 6] |\n| 61 | added | AASB 17 [page 76] |\n| 62-63 | added | AASB 2023-1 [page 6] |\n| 65 | added | AASB 2024-3 [page 9] |\n| AusA1 | amended | AASB 2016-2 [page 6] |\n| Appendix A | replaced | AASB 1060 [page 61] |\n\n\nTable of amendments to guidance\n\n| Illustrative example A | amended<br>amended | AASB 2016-2 [page 6]<br>AASB 16 [page 47] |\n| --- | --- | --- |\n| Illustrative example C | added | AASB 2016-2 [page 7] |\n\n\n \n\nDeleted IAS 7 text\n\nDeleted IAS 7 text is not part of AASB 107.\n\n2 This Standard supersedes IAS 7 Statement of Changes in Financial Position, approved in July 1977.\n\n3 … Accordingly, this Standard requires all entities to present a statement of cash flows.   [the last sentence of the paragraph]\n\n54 IAS 27 (as amended in 2008) amended paragraphs 39–42 and added paragraphs 42A and 42B. An entity shall apply those amendments for annual periods beginning on or after 1 July 2009. If an entity applies IAS 27 (amended 2008) for an earlier period, the amendments shall be applied for that earlier period. The amendments shall be applied retrospectively.\n\n55 Paragraph 14 was amended by Improvements to IFRSs issued in May 2008. An entity shall apply that amendment for annual periods beginning on or after 1 January 2009. Earlier application is permitted. If an entity applies the amendment for an earlier period it shall disclose that fact and apply paragraph 68A of IAS 16.\n\n56 Paragraph 16 was amended by Improvements to IFRSs issued in April 2009. An entity shall apply that amendment for annual periods beginning on or after 1 January 2010. Earlier application is permitted. If an entity applies the amendment for an earlier period it shall disclose that fact.\n\n57 IFRS 10 and IFRS 11 Joint Arrangements, issued in May 2011, amended paragraphs 37, 38 and 42B and deleted paragraph 50(b). An entity shall apply those amendments when it applies IFRS 10 and IFRS 11.\n\n58 Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27), issued in October 2012, amended paragraphs 42A and 42B and added paragraph 40A. An entity shall apply those amendments for annual periods beginning on or after 1 January 2014. Earlier application of Investment Entities is permitted. If an entity applies those amendments earlier it shall also apply all amendments included in Investment Entities at the same time.\n\n \n","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":true,"description":"Originally focused simply on presenting historical cash flows in three categories, the standard has expanded significantly. The 2016 amendments added comprehensive reconciliation requirements for financing liabilities (44A-44E). The 2023 amendments introduced entirely new disclosure regimes for supplier finance arrangements (44F-44H) — a response to corporate collapses where reverse factoring hid true liquidity positions. The 2024 amendments further refined equity method investment reporting. The standard has evolved from a pure cash flow presentation standard into a broader liquidity and financing transparency tool."},"complexity_factors":["Multiple reporting methods (direct vs indirect) with different disclosure requirements","Complex classification rules for interest/dividends (can be operating, investing OR financing depending on entity type)","Extensive cross-referencing to other AASB standards (AASB 101, 108, 121, 123, 16, 17, 10, 8, etc.)","Nested exceptions for financial institutions vs other entities","Foreign currency translation requirements with specific exchange rate rules","Detailed reconciliation requirements for liabilities arising from financing activities (paragraphs 44A-44E)","New granular disclosure requirements for supplier finance arrangements (paragraphs 44F-44H) with multiple sub-elements","Special rules for investment entities, subsidiaries, associates and joint ventures","Australian-specific \"Aus\" paragraphs creating dual compliance tracks for for-profit vs not-for-profit entities","Multiple effective dates and transition provisions across different amendments"],"plain_english_summary":"**What this legislation does:**\n\nThis is **AASB 107**, the Australian accounting standard that requires companies and organisations to prepare a **Statement of Cash Flows** — a financial report showing exactly where cash came from and where it went during a specific period.\n\n**Who it affects:**\n\n*   **All entities** preparing general purpose financial statements in Australia (companies, not-for-profits, government bodies)\n*   **Investors, lenders, and regulators** who need to assess an entity's ability to generate cash and pay its bills\n*   **Tier 2 entities** (smaller organisations) get simplified disclosure requirements\n\n**Why it matters:**\n\nWhile a profit and loss statement shows if an entity made money \"on paper,\" this standard reveals the **cold hard cash reality**. It helps answer crucial questions like:\n\n*   Can the business actually pay its debts?\n*   Is it generating enough cash from operations, or just borrowing to survive?\n*   Where is the money really coming from — customers, selling assets, or bank loans?\n\n**Key requirements:**\n\n*   **Three categories of cash flows:**\n    *   **Operating activities** — day-to-day business (sales, paying suppliers, wages)\n    *   **Investing activities** — buying/selling long-term assets (property, equipment, investments)\n    *   **Financing activities** — raising or repaying capital (shares, loans, dividends)\n\n*   **Two ways to report:**\n    *   **Direct method** — shows actual cash receipts and payments (encouraged)\n    *   **Indirect method** — starts with profit and adjusts for non-cash items\n\n*   **Special disclosures:**\n    *   Changes in liabilities from financing activities (reconciliation required)\n    *   **Supplier finance arrangements** (new requirement) — revealing \"supply chain finance\" or \"reverse factoring\" deals that can hide debt\n    *   Restricted cash balances that can't be used\n    *   Foreign currency cash flow translation rules\n\n**Recent additions:**\n\nThe 2023 amendments added transparency around **supplier finance arrangements** — controversial financing tricks where companies extend payment terms through third-party lenders, potentially masking liquidity problems."},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":true,"description":"The core obligation remains that an entity must present a statement of cash flows classified by operating, investing and financing activities (para 1; para 10). However, the Standard’s scope and coverage have been extended and refined by subsequent amendments and application guidance: it now contains explicit requirements for reconciliations of liabilities from financing activities (paras 44A–44E) and for supplier finance arrangement disclosures (paras 44F–44H), and it recognises an exclusion for entities reporting under the Tier 2 simplified disclosures framework (AusA1). The Standard also incorporates amendments tied to other Standards (for example AASB 16, AASB 17 and AASB 1060) with differing effective dates (paras 59–65 and compilation details), which changes the practical perimeter and timing of what preparers must disclose compared with the original issuance."},"complexity_factors":["Multiple permitted presentation methods (direct vs indirect) and consequential disclosure differences (paras 18–20)","Flexible classification choices for items such as interest, dividends and certain cash flows (paras 31–34; para 12)","Extensive disclosure requirements added by amendments (reconciliation of financing liabilities paras 44A–44E; supplier finance paras 44F–44H)","Cross-references to other Standards for classification, consolidation and translation (AASB 101, 108, 10, 121, 123 and others — front matter; paras 27; para 59–65)","Exceptions and scope carve-outs (Tier 2 simplified disclosures AusA1) increasing situational application complexity","Practical implementation issues acknowledged in the Standard (tax cash flows impracticable to identify; foreign-currency translation approximations — paras 36, 27)","Non-cash transaction treatment and separate disclosure requirements (para 43)","Multiple effective dates and transitional amendments for different paragraphs creating timing complexity (paras 59–65 and compilation details)"],"plain_english_summary":"What this Standard does, mechanically\n\n- Requires each entity that prepares financial statements to include a statement of cash flows as an integral part of those financial statements for every reporting period (para 1). The statement must classify cash flows into operating, investing and financing activities (Objective; para 10).\n\n- Defines cash, cash equivalents and cash flows, and sets tests for what qualifies as a cash equivalent (short maturity, readily convertible, insignificant risk of value change — para 6–7). It also permits certain banking arrangements (for example, overdrafts repayable on demand) to be treated as cash or cash equivalents in the specific circumstances described (para 8).\n\n- Requires presentation choices and classes of information: an entity must present cash flows by activity and may use either the direct method (gross receipts/payments) or the indirect method (adjust profit or loss for non-cash items) for operating cash flows (paras 10, 18–20). The Standard encourages the direct method (para 19).\n\n- Sets classification guidance and examples for operating, investing and financing activities so preparers can allocate individual cash flows to the appropriate category (paras 13–17). It permits some cash flows to be reported on a net basis where turnover is quick, amounts are large and maturities are short, or when the cash flows reflect activities of customers rather than the entity (paras 22–24).\n\n- Requires a range of disclosures to help users assess liquidity and financing: examples include a reconciliation of liabilities arising from financing activities (paras 44A–44E), disclosure of supplier finance arrangements (paras 44F–44H), components and policy for cash and cash equivalents (paras 45–47), restrictions on significant cash balances with management commentary (para 48) and certain segmental and undrawn facility information (para 50).\n\n- Excludes non‑cash investing and financing transactions from the statement of cash flows but requires those transactions to be disclosed elsewhere in the financial statements (para 43).\n\nWho this affects\n\n- Preparers of general purpose financial statements: the obligation to prepare and present a statement of cash flows applies to an \"entity\" as defined in accounting standards (para 1). Appendix A notes that entities preparing general purpose financial statements under the Tier 2 simplified disclosures framework (AASB 1060) are outside the application of this Standard (AusA1).\n\n- Users of financial statements: investors, creditors, analysts and others who rely on historical cash flow information to assess liquidity, solvency and the ability to generate cash (Objective; paras 4–5).\n\nWhy it matters (official rationale and mechanical effect)\n\n- The Standard’s stated objective is to give users a basis to assess an entity’s ability to generate cash and cash equivalents and the timing and certainty of their generation (Objective). It explains that cash flow information complements the rest of the financial statements for evaluating financial structure, liquidity, solvency and the relationship between profit and cash flow (paras 4–5).\n\nAnalyst’s practical lens — who pays, who decides, incentives, trade-offs and implementation points\n\n- Who pays: preparers (entities) bear the direct compliance costs of preparing the statement and the related disclosures (para 1; paras 44A–44H; paras 45–50). Those costs include gathering gross cash-receipt/payments detail under the direct method (paras 18–19) and producing reconciliations of financing liabilities and supplier finance information (paras 44A–44H).\n\n- Who decides: management/preparers choose presentation options permitted by the Standard (for example, direct vs indirect method (para 18), classifications of interest/dividends (paras 31–34), whether certain items qualify as cash equivalents (para 7), and whether overdrafts qualify as cash equivalents in specific banking arrangements (para 8)). These choices must be disclosed where required (paras 45–47; para 46).\n\n- Incentives and behaviour changes: because the Standard allows choice in classification (e.g. whether interest and dividends are operating, investing or financing — paras 31–34) and allows some net presentation (paras 22–24), preparers can influence how cash generation and financing appear in the statement. That changes the information available to users and may affect credit and investment decisions that rely on operating cash flow metrics (paras 13–14; para 19). The Standard encourages the direct method because it provides gross cash-flow detail useful for forecasting (para 19).\n\n- Compliance burden and implementation risks: the Standard introduces specific, potentially detailed disclosure requirements that increase preparer workload — for example, reconciliations of liabilities from financing activities (paras 44A–44D) and supplier finance arrangement disclosures (paras 44F–44H). Some practical difficulties are recognised in the text: tax cash flows are usually classified as operating because it is often impracticable to identify tax cash flows with individual investing or financing transactions (para 36). The Standard permits approximations when translating foreign-currency cash flows (para 27), which reduces operational burden at the cost of some precision.\n\n- Bureaucratic discretion and cross-standard reliance: the Standard references and depends on other accounting Standards for classification and measurement guidance (see front matter and paras referring to AASB 101, AASB 108, AASB 10, AASB 121, AASB 123 and others). Preparers must apply those cross-referenced standards when implementing classification, hedging and consolidation rules (front matter; paras 27; para 42A; para 59–65).\n\n- Trade-offs and opportunity costs: the Standard seeks to increase user insight (paras 4–5) while preserving preparer flexibility. The result is a trade-off: greater transparency where specific reconciliations and supplier-finance disclosures are required (paras 44A–44H), versus continued optionality in classification that reduces immediate comparability across entities (paras 18; 31–34; para 22). The Standard explicitly requires disclosure of policies (for example, the composition of cash and cash equivalents) to help users understand those choices (paras 46–47).\n\nKey implementation points and examples in the Standard\n\n- Method choice: direct or indirect for operating cash flows (paras 18–20). The direct method requires major classes of gross cash receipts and payments; the indirect method reconciles profit or loss to cash flows (paras 18–20).\n\n- Financing-liability reconciliation: entities must disclose changes in liabilities arising from financing activities including cash flows, non-cash changes, foreign-exchange effects and fair-value changes; a reconciliation linking opening and closing balances is one acceptable approach (paras 44A–44D).\n\n- Supplier finance: entities using supply-chain finance or reverse-factoring must disclose terms, carrying amounts as at period start and end, amounts already paid to suppliers by finance providers, and ranges of payment due dates for those liabilities and comparable trade payables (paras 44F–44H).\n\n- Non-cash transactions: excluded from the cash flow statement but required to be disclosed elsewhere (para 43).\n\nWhere to look in the Standard for the rules cited above\n\n- Core requirement to prepare a statement of cash flows: para 1.\n- Classification of activities: paras 10, 13–17.\n- Direct vs indirect methods: paras 18–20.\n- Cash equivalents and short-maturity guidance: paras 6–9.\n- Reconciliation of liabilities from financing activities: paras 44A–44E.\n- Supplier finance disclosures: paras 44F–44H.\n- Disclosures about components and policies for cash and cash equivalents: paras 45–47.\n- Restrictions on cash balances and encouraged additional disclosures: paras 48–51.\n\nThis Standard consolidates presentation and disclosure rules that require preparers to provide both a classified statement of cash flows and a suite of supporting disclosures intended to help users evaluate liquidity and financing position, while preserving some preparer choice on classification and presentation whose exercise affects reported measures (paras 1; 10; 18; 31–34; 44A–44H)."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. 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