10/05/2015 - EFRAG's comment letter on the IASB's ED/2014/6 Disclosure Initiative (Proposed amendments to IAS 7)
- disclose a reconciliation of the amounts in the opening and closing statements of financial position for each item for which cash flows have been, or would be, classified as financing activities in the statement of cash flows, excluding equity items; and
- disclose information about the restrictions that may affect the decisions of an entity to use cash and cash equivalent balances, when that information is relevant to understand the entity's liquidity risk.
In its final comment letter, EFRAG:
- supports the objective to provide information on the period-on-period movements in debts but expresses dissatisfaction with the piecemeal approach to modifying current guidance and introducing prescriptive guidance without first establishing objectives for the disclosures;
- calls for principle-based objectives for the proposed disclosures and for sufficient flexibility to allow entities to exercise judgement in deciding the components of their liabilities to reconcile; and
- does not support the proposed disclosures about restrictions on cash and cash equivalent balances and encourages the IASB to provide clarifications to the existing Standards, rather than introduce additional disclosure requirements.
The final comment letter is available here: