Cashflow reporting - ACT endorses CRUF recommended best practice

The ACT has endorsed the proposals from CRUF (The Corporate Reporting Users’ Forum) for companies to adopt improved cashflow reporting disclosures over and above the compulsory requirement of International Financial Reporting Standards.

The ACT agrees that a key objective for users of accounts is to be able to understand the cashflow, what is driving it, and how the cashflow reconciles with the net debt movement.

In November 2008 CRUF wrote to Finance Directors and CFOs of major companies explaining their concerns over cashflow reporting and suggesting a voluntary best practice. Treasurers are advised to be aware of these proposals and, alongside their accounting colleagues, to consider whether their own company’s reporting could be improved.

CRUF deliberately do not propose a specific format for the disclosures leaving companies to decide what is most suitable. Stuart Siddall, the new CE of the ACT has himself suggested some additional information be included to explain differences between cash flow and reported profits, and to provide data on average net cash / net debt throughout the year.