Deloitte
Accounting Research Tool
...
10 Overall

A Roadmap to the Preparation of the Statement of Cash Flows

A Roadmap to the Preparation of the Statement of Cash Flows

This Roadmap provides Deloitte’s insights into and interpretations of the accounting guidance on the statement of cash flows, primarily that in ASC 230.

You must log in to view this content and have a subscription package that includes this content.

Required subscriptions

  • US GAAP
This Roadmap provides Deloitte’s insights into and interpretations of the accounting guidance on the statement of cash flows, primarily that in ASC 230.
The accounting principles related to the statement of cash flows have been in place for many years; however, errors in the statement of cash flows continue to be causes of restatements and registrants continue to receive comments from the SEC staff on cash flow presentation matters.
While ASC 230 provides some guidance on cash payments and receipts that are classified as either operating, investing, or financing activities, it does not provide consistent principles for evaluating the classification of certain cash payments and receipts in the statement of cash flows, which has led to diversity in practice. In recent years, the FASB issued ASU 2016-15 and ASU 2016-18, which clarified guidance in ASC 230 on the classification of certain cash flows and removed some of the diversity in practice. This Roadmap reflects the amendments to ASC 230 made by these ASUs and includes some of Deloitte’s interpretive views on them.
The 2020 edition also incorporates interpretations and guidance related to the new leasing standard, ASU 2016-02 (codified in ASC 842; see Section 7.6). ASU 2016-02 amended the leasing guidance in U.S. GAAP — notably by requiring lessees to recognize liabilities for lease payments and right-of-use assets — and became effective for calendar-year-end public business entities on January 1, 2019. In addition, in response to the global COVID-19 pandemic, the FASB issued a proposed ASU on April 21, 2020, that would revise the effective dates of both the revenue and leasing standards.
This Roadmap includes several new discussions as well as some modifications to previously expressed views. Appendix H highlights all new content as well as any substantive revisions to previous content.