17 ASC 305 CASH AND CASH EQUIVALENTS
PERSPECTIVE AND ISSUES
ASC 305, Cash and Cash Equivalents, contains one subtopic:
- ASC 305-10, Overall, that provides implementation guidance on cash on deposit at a financial institution.
ASC 305 applies to all entities and has no scope exceptions.
Assets displayed on the statement of financial position are the resources available to the reporting entity to support its current and future operations. To provide information about liquidity, the assets are often divided into current and noncurrent assets. Current assets consist of cash and other assets that are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business. When the normal operating cycle is less than one year, a one-year period is used to distinguish current assets from noncurrent assets. If the operating cycle exceeds one year, the operating cycle is the proper period to use for current asset identification. When information about current assets is accompanied by information about current liabilities, readers of the financial statements can assess the amount of net working capital (current assets less current liabilities) possessed by the reporting entity and its current ratio (current ...