Financial Reporting Statements (FRS) sets out the structure of a cash flow statement and it also sets the minimum level of disclosure.
The financial reporting standard begins with the following statement,
The objective of this financial reporting standard is to ensure that reporting entities falling within its scope:
- Reporting their cash generation and cash absorption for a period by highlighting the significant components of cash flow in a way that facilitates comparison of the cash flow performance of different business.
- Provide information that assists in the assessment of their liquidity, solvency and financial adaptability.
The financial reporting standards (FRS) applies to all financial statements intended to give a true and fair view of the financial position and profit or loss, except those of various exempt bodies in group accounts situations or where the content of the financial statement is governed by other statues or regulatory regimes. In addition, small entities are excluded as define by companies legislation.