Issues considered but not included in the Annual Improvements to IFRSs project

IAS 7 Statement of Cash Flows-Classification of cash payments for deferred and contingent consideration

In June 2011, the Interpretations Committee received a request for guidance on the classification of cash payments for deferred and contingent considerations under IAS 7 Statement of Cash Flows. The submitter asked the Committee to clarify:

1. whether the settlement of contingent consideration should be classified as an operating, an investing or a financing activity in the statement of cash flows; and
2. whether the subsequent settlement of deferred consideration for a business combination should be classified as an investing or a financing activity in the statement of cash flows.