Wiley GAAP 2019

6ASC 230 STATEMENT OF CASH FLOWS

PERSPECTIVE AND ISSUES

Technical Alert

The FASB asked the EITF to address nine statement of cash flows issues. Eight of those issues were resolved in ASU 2016-15, and the ninth was resolved by ASU 2016-18.

ASU 2016-15, Statement of Cash Flows (a Consensus of the Emerging Issues Task Force)

Guidance

The exhibit following lists the issues and how they were resolved.

Exhibit—ASU 2016-15—Summary of Changes

EITF Issue		Accounting Treatment
1	Debt prepayment or debt extinguishment cost	Classify as cash outflows for financing activities. (ASC 230-10-45-15)
2	Settlement of zero-coupon debt instruments, including other debt instruments, with insignificant coupon rates relative to the effective interest rate of the borrowing	Classify the interest portion as cash outflows of operating activities. (ASC 230-10-45-17) Classify the principal portion as cash outflows for financing activities. (ASC 230-10-45-15)
3	Contingent consideration payments made by an acquirer soon after a business combination. (Soon is defined as three months or less.)	Classify payments made soon after an acquisition’s consummation date as cash outflows for investing activities. (ASC 230-10-45-13) Classify payments made after three months as cash outflows for financing activities up to the amount of the original contingent consideration liability. (ASC 230-10-45-15) Classify payments over the amount of the original contingent consideration liability as cash outflows from ...