The cash flow statement is a fundamental part of the financial statements and important to users of accounts to see the health of a company or group. The topic came third in the Financial Reporting Council’s (FRC) list of most frequently raised areas in their 2020–21 Corporate Reporting Review.

The FRC was specifically concerned with the number of actual errors they had found in cashflow statements, with items incorrectly classified as operating, financing or investing activities. Last year they asked six companies to restate their cash flow statements and are urging companies to look carefully at their cashflows this year before publishing their annual reports.