(i)
Ind AS 7 specifically includes
bank overdrafts which are repayable on demand as a part of cash and cash
equivalents, whereas the existing AS 3 is silent
on this aspect (refer paragraph 8 of Ind AS
7).
(ii)
Ind AS 7 provides the treatment
of cash payments to manufacture or acquire assets held for rental to others and
subsequently held for sale in the ordinary course of business as cash flows
from operating activities. Further, treatment of cash receipts from rent and
subsequent sale of such assets as cash flow from operating activity is also
provided (refer paragraph 14 of Ind AS 7). The existing AS 3 does not contain
such requirements.
(iii)
Ind AS 7 includes the following
new examples of cash flows arising from financing activities (refer paragraph
17 of Ind AS 7):
(a) cash payments
to owners to
acquire or redeem
the entity’s
shares
(b)
cash proceeds from
mortgages
(c)
cash payments by a lessee for the reduction of the outstanding
liability relating to a finance lease.
(iv) As compared to the existing AS 3, Ind AS 7 specifically requires
adjustment of the profit or loss for the effects of ‘undistributed profits of
associates and non-controlling interests’ while determining the net cash flow
from operating activities using the indirect method (refer paragraph 20(b) of
the Ind AS 7).
(v)
The existing AS 3 requires cash flows associated with
extraordinary activities to be separately classified as arising from operating,
investing and financing activities, whereas Ind AS 7 does not contain this
requirement.
(vi) As compared to the existing AS 3, Ind AS 7 requires to disclose
the amount of cash and cash equivalents and other assets and liabilities in the
subsidiaries or other businesses over which control is obtained or lost (refer
paragraph 40(c) and (d) of Ind AS 7). Ind AS 7 also requires to report the
aggregate amount of the cash paid or received as consideration for obtaining or
losing
control of
subsidiaries or other
businesses in the
statement of cash
flows, net of cash and cash equivalents acquired or disposed of as a part of
such transactions, events or changes in circumstances (refer paragraph 42 of
Ind AS 7). The existing AS 3 does not contain such requirements.
(vii)
Ind AS 7 requires to classify cash flows arising from changes in
ownership interests in a subsidiary that do not result in a loss of control as
cash flows from financing activities (refer paragraphs 42A and 42B of Ind AS
7). The existing AS 3 does not contain such a requirement.
(viii)
Ind AS 7 mentions the use of Equity or Cost method while
accounting for an investment in an associate or a subsidiary (refer paragraph
37 of Ind AS 7). It also specifically deals with the reporting of interest in a
jointly controlled entity using proportionate consolidation and using equity
method (refer paragraph 38 of Ind AS 7). The existing AS 3 does not contain
such requirements.
(ix)
Ind AS 7 uses the term ‘functional currency’ instead of
‘reporting currency’ (as used in the existing AS 3) . Ind AS 7 also
deals with translation of cash flows of a foreign subsidiary (refer paragraphs
25 to 27 of Ind AS 7) whereas in the existing AS 3, it is not dealt with.
Ind AS 7 requires more
disclosures as compared to the existing AS 3 (refer paragraph 50 of the Ind AS
7).