Accounting Change as per IFRS

10. Cash-Flow Statements

The statement of cash flows is a mandatory component of financial statements under IFRS, as an equal partner to the balance sheet and the statement of income. Impact: IFRS will require an analysis of existing corporate cash-flow reporting for regulatory purposes. Companies preparing a cash-flow statement for the regulators for the first time will have to decide 1) whether to use the direct or indirect method and 2) how to classify their activities (operating, investment, or financing) according to the categories in IAS 7. Many companies may want to consider changing their chart of accounts and the accounting entry logic in their software programs to obtain the right classification and level of detail.

SAP Solution - The cash-flow statement is an integral part of SAP software’s financial statement reporting functionality. Direct and indirect cash-flow methods are supported. SAP applications also provide standard cash-flow reporting templates.