International Accounting Standard 7

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The International Accounting Standard 7 ( IAS 7 ) is an accounting standard of the International Accounting Standards Board (IASB) with the German title "Cash Flow Statements". The aim of this standard is to provide information about the movements of cash and cash equivalents in a company. This information is provided by a cash flow statement , which shows the cash flows for the reporting period

  • operational activity ( operational cash flow ),
  • investment activity ( investive cash flow ) and
  • financing activities ( finance cash flow )

classified.

This results in:

Cash generated from operations
+/- cash flow from investing activities
+/- cash flow from financing activities
= Increase or decrease in liquid funds
+ liquid funds at the beginning of the year
= Liquid funds at the end of the year

The liquid funds, also known as financial funds , consist of cash , bank balances and securities with a term of a maximum of three months.

Cash flow from operating activities shows the company's ability to generate cash to keep its business operations, invest , repay loans, and pay dividends without access to outside funding.

For better information, cash flows must be derived from the annual financial statements. The derivation in the area of ​​current business cases can be made using a direct or indirect method.

See also