The Statement of Cash Flows: Compliance & Presentation Update

Author: Lewis R. Fisher

The primary purpose of a statement of cash flows is to explain the change in cash and cash equivalents during a period. Even though it usually takes a back seat to the balance sheet and income statements, the statement of cash flows is required as part of a full set of financial statements for all business entities. Often times the nuances of this statements are a mystery to those in public practice, and key matters may be missed, improperly disclosed, or improperly classified. A short refresher on the statement, through the lens of Topic 230, “Statement of Cash Flows” will help us put together an action plan for ensuring the reliability of this data for users of the financial statements.

Publication Date: January 2019

Designed For
Anyone with financial reporting responsibilities and those in public accounting serving clients who utilize US GAAP.

Topics Covered

• Overview of the specifics ASC 230, "Statement of Cash Flows"
• Common items misclassified within the statement
• Areas where the practitioner can aid users of the financial statement
• Consideration of ASU 2016-05 and its impact on the classification of certain cash receipts and cash disbursements

Learning Objectives

• Recognize how to quickly spot and recognize reporting errors and provide corrective guidance
• Identify how to apply new accounting standards, particularly ASU 2016-05
• Gain the ability to guide clients and those who prepare financial statements through an efficient and effective process for completing the statement of cash flows
• Describe the importance of the message provided to users of the statement via each category (i.e. operating, investing, financing)
• Identify cash transactions and how they are classified
• Differentiate ASU topics and how they apply

Level
Update

Instructional Method
Self-Study

NASBA Field of Study
Accounting (2 hours)

Program Prerequisites
Basic understanding of cash flow and US GAAP.

Advance Preparation
None