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IAS 7 Amendments - Disclosure Initiative


Project history

The objective of this project is to enable users of financial statements to evaluate changes in liabilities arising from financing activities. On 18 December 2014, the IASB issued an Exposure Draft in which the IASB was proposing:

  1. that an entity should 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.

  2. to extend the disclosures required by IAS 7 Statement of Cash Flows about an entity’s liquidity and proposes disclosures about the restrictions that affect the decisions of an entity to use cash and cash equivalent balances, including tax liabilities that would arise on the repatriation of foreign cash and cash equivalent balances.

The Exposure Draft also included proposed changes to the IFRS Taxonomy to reflect the effect of the proposed amendments to IAS 7.

EFRAG’s Comment Letter

On 11 February 2015, EFRAG published its draft comment letter.

A written procedure to approve EFRAG’s final comment letter on the ED was launched with the EFRAG Board on 4 May 2015 and was concluded on 11 May 2015.

On 11 May 2015, EFRAG published its final comment letter where it:

  1. 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;

  2. 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

  3. 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 Amendments

On 29 January 2016, the IASB issued the final amendments to IAS 7. The amendments require companies to provide information about changes in their financing liabilities and come as a response to requests from investors for information that helps them better understand changes in a company’s debt. The IASB decided not to include disclosures on cash and cash equivalents in the amendments to IAS 7 related to the reconciliation of liabilities from financing activities.

EFRAG's Endorsement Advice

On 11 April 2016, EFRAG issued its draft endorsement advice in which EFRAG concluded that the Amendments satisfy all criteria for EU endorsement and therefore recommended their endorsement.

After having considered feedback from its constituents, EFRAG published its final endorsement advice on 6 June 2016 where it supported the adoption of the Amendments and recommended their endorsement. EFRAG’s recommendation is explained in the letter to the European Commission and the accompanying Appendices.


The Amendments were endorsed on 6 November 2017. The endorsement decision was published in the Official Journal of the European Union on 9 November 2017.

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