Wiley GAAP 2020

6ASC 230 STATEMENT OF CASH FLOWS

• Perspective and Issues
  • Subtopic
  • Scope and Scope Exceptions
• Definitions of Terms
• Concepts, Rules, and Examples
  • Cash Focus
  • Classification of Cash Receipts and Disbursements
  • Operating Activities Presentation
    • The Direct Method
    • The Indirect Method
    • Reconciliation of Net Income and Net Cash Flow from Operating Activities
    • Comparison of Methods
  • Other Requirements
    • Gross versus Net Basis
    • Discontinued Operations
    • Cash Flow per Share
  • Net Reporting by Financial Institutions
  • Reporting Hedging Transactions
  • Reporting Foreign Currency Cash Flows
  • Preparation of the Statement—Comprehensive Example
    • Objective
    • Direct Method
    • Indirect Method
    • Using T-Accounts
    • Example of Preparing a Statement of Cash Flows
  • Statement of Cash Flows for Consolidated Entities
  • Disclosures
  • Other Sources (ASC 230-10-60)

PERSPECTIVE AND ISSUES

Entities must:

• explain the changes in the combined total of restricted and unrestricted cash.
• combine restricted cash with unrestricted cash and cash equivalents in the statement of cash flows and entities.
• not present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents.

  (ASC 230-10-45-4 and 45-6)

The ASC does not provide a formal definition of unrestricted cash, but entities must disclose information about the nature of the restriction. Companies generally present restricted cash separately from cash and cash equivalents. However, the line item may not be titled restricted cash.

Subtopic