Faculty Scholarship 1994 - Present

Convergence to International Financial Reporting Standards for the Statement of Cash Flows: --'Where Got, Where Going

Major events have transpired during the past few years to make harmonization of world financial reporting standards a distinct possibility. An understanding of differences between U.S. GAAP and IFRS will be essential to make decisions in an international environment. This study examines how companies in five different countries report the statement of cash flow (SCF) using IFRS guidelines. The first part of the paper will be a short discussion of the history of the Statement of Cash Flows. The second part of the paper will be a discussion on the different requirements for companies reporting cash flows under the requirements of U.S. GAAP vs. IFRS. The third part of the paper analyzes data collected from the Global Vantage database (GVd). The authors found the majority of firms using IFRS included interest/dividends received/paid in all three sections of the SCF. Even though the authors were limited as to the amount of information GVd discloses, they believe the direct method and other recommended modifications will enhance the information content of the financials with proper disclosures.