Statement of Cash Flows: Q5

Q5: Are Statements of Cash Flows usually shown inclusive or exclusive of GST?


Items in the Statement of Cash Flows are usually presented on a GST-inclusive basis.

Interpretation 1031 Accounting for the Goods and Services Tax (GST) is an Australian interpretation from the Australian Accounting Standards Board (AASB) dealing with the accounting implications of GST. This states:

“Cash flows shall be included in the statement of cash flows on a gross basis [ie GST-inclusive basis]…”

Interpretation 1031 para 10

AASB Interpretations have the same authority as accounting standards in Australia; so we can expect that with Australian firms at least, items in the Statement of cash flows will be on a GST-inclusive basis (see Chapter 2, Section 2.2 page 2-6). Having said that, for our firms in countries other than Australia, there can be exceptions. For example, Ryman Healthcare (which is a New Zealand-based company) shows its Statement of cash flows exclusive of GST:

“The statement of cash flows is prepared exclusive of Goods and Services Tax (“GST”), which is consistent with the method used in the Income Statement.”

Ryman Healthcare 2017 Annual Report, p.29: Summary of significant accounting policies section (p)


Also, see Martin’s videos, Statement of Cash Flows: GST-inclusive.