Common U.S. GAAP Issues Facing Accountants, 2nd Edition

Chapter 12The Financial Statements

Learning objectives

• Identify the requirements in FASB ASC 210, Balance Sheet.
• Identify the requirements in FASB ASC 220, Income Statement–Reporting Comprehensive Income.
• Identify the requirements in FASB ASC 230, Statement of Cash Flows.

Overview

This chapter addresses general financial statement presentation guidance included in the following:

• FASB ASC 210,
• FASB ASC 220
• FASB ASC 230.

The balance sheet

The balance sheet is commonly referred to as a statement of financial position. Both titles are interchangeable. FASB ASC 210 provides

• general overall information on the classification of current assets and current liabilities, and provides a discussion on the determination of working capital; and
• specific guidance about offsetting amounts for certain contracts and repurchase and reverse repurchase agreements.

The balance sheets of most entities show separate classifications of current assets and current liabilities (commonly referred to as classified balance sheets) permitting ready determination of working capital.

Financial position, as it is reflected by the records and accounts from which the statement is prepared, is revealed in a presentation of the assets and liabilities of the entity. In the statements of manufacturing, trading, and service entities, these assets and liabilities are generally classified and segregated; if they are classified logically, summations or totals of the current or circulating or working assets (referred ...