Crime Against Humanity: the Holy GAAP, 16
Just like IAS 32, IAS 7, Cash−flow statements, covering the specific facet of cash flows, follows the previous IAS 39 in logical sequence as well; hence, we can reasonably assume that a couple of definitions in its paragraph 6 and a requirement in its paragraph 24 are generally valid:
“Definitions, 6. The following terms are used in this standard with the meanings specified:
Cash comprises cash on hand and demand deposits.
Cash equivalents are short−term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Cash flows are inflows and outflows of cash and cash equivalents. […]
24. Cash flows arising from each of the following activities of a financial institution may be reported on a net basis:
(a) cash receipts and payments for the acceptance and repayment of deposits with a fixed maturity date; […]”
Before we draw some conclusion, just to be doubly sure, let’s check whether other IAS/IFRS apply:
IAS 39, paragraph 2: “Scope, 2. This standard shall be applied by all entities to all types of financial instruments except: […]”, after which no item in the following list appears to show any pertinence to money. A first confirmation of IAS 39.
IAS 37, Provisions, contingent liabilities and contingent assets. What does IAS 37 have to do with money? Well, since we are investigating a creation of purchasing power out of nothing, we might consider being in the vicinity of the concept of contingent asset, and IAS 37 defines it in paragraph 10: “Definitions, 10. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non−occurrence of one or more uncertain future events not wholly within the control of the entity.” So let’s see its paragraph 2: “Scope, 2. This standard does not apply to financial instruments (including guarantees) that are within the scope of IAS 39 Financial instruments: recognition and measurement.” A second confirmation of IAS 39.
