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Attracting investment through clear cash reporting

Investors are keen to see clear disclosure on the generation, availability, and use of cash. The Financial Reporting Council (FRC) Lab has investigated and produced a detailed report on cash reporting.

Below are the three main areas where investors want good disclosure and ideas of what these disclosures should contain. Further details on investor and preparer views, highlights of guidance and research and examples of useful disclosures can be seen in the full report.

Drivers of performance

Overall investors would like companies to provide a clear description of the drivers of current (and future) performance and position, in the context of cash, supported by appropriate metrics.

Sources of cash

Overall investors would like companies to provide details about sources of cash, both now and in the future.

Uses of cash

Overall investors would like companies to provide detail on uses of cash both in the past and in the future.as this aids in assessing the value of the business and the quality of management’s stewardship.

The report provides details of the research and examples of disclosures in each area.

If you need any further information or advice, please speak to Louise Ward.

authors:louise-ward