The 'Cash' in Cash Flow Statements: A Multi-Country Comparis

Recent pronouncements of some national accounting standard-setting bodies illustrate the requirement that reporting enterprises issue cash flow statements (CFS) rather than statements of changes in financial position. Five countries have issued such standards: Canada, New Zealand, the US, South Africa, and the UK and Ireland. A review of existing standards and CFSs prepared in accordance with them reveals terminological confusion on what preparers and regulators understand by cash. The most important finding is that "cash" is not always "cash" in CFSs, whether viewed from the perspective of pronouncements in national accounting standards or the perspective of cash flow information published in financial statements from across the world. This finding exposes a defect in the frameworks for conceptual understanding of corporate reports developed by some national accounting standard-setting bodies. National and global inter-company comparability of financial figures will not necessarily be improved by cash flow information.