The Statement of Cash Flows: Compliance & Presentation Update (Currently Unavailable)

Author: Lewis R. Fisher

CPE Credit:  2 hours for CPAs

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: June 2022

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
  • Recognize how to 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
  • Recognize the importance of the message provided to users of the statement via each category (i.e., operating, investing, financing)
  • Identify the primary purpose of a statement of cash flows
  • Describe the three categories of cash flows included on a statement of cash flow
  • Differentiate ASUs and how they apply to cash flow
  • Recognize what is excluded from investing activities
  • Differentiate presentation methods and how they apply to cash flow

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

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