IAS 7Chapter 5Lesson 1
Gross or net: when may cash flows be offset?
Step 1 of 8Learning objectives
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Gross receipts and payments from investing and financing activities are reported separately. Offsetting is permitted in only two cases: cash flows on behalf of customers that reflect the customer's activities, and items with quick turnover, large amounts and short maturities. Financial institutions have additional cases (fixed maturity deposits, interbank placements, loans to customers).
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Learning objectives
- Distinguish cash flows to be reported gross from those that may be reported net.
- Calculate a permitted net cash flow and check the prohibition on offsetting other cash flows.