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On the Radar

Statement of Cash Flows

November 2021
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On the Radar
Statement of Cash Flows

Because ASC 230 is largely principles-based, financial statement preparers must exercise significant judgment when classifying certain cash receipts and payments in their statement of cash flows. Given the lack of prescriptive rules, cash flow presentation continues to challenge financial statement preparers. While the FASB has issued two ASUs in the past few years to assist financial statement preparers and to reduce the diversity in practice regarding cash flow presentation, registrants continue to receive comments from the SEC staff regarding the statement of cash flows. In addition, while the guidance on cash flow presentation of government assistance is not new, certain financial statement preparers may need to brush up on how to present cash flows associated with government grants stemming from the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).1


See Deloitte’s April 9, 2020 (last updated September 18, 2020), Heads Up for more information about the CARES Act and related financial reporting considerations.
These examples of SEC comments have been reproduced from the SEC’s Web site. Dollar amounts and information identifying registrants or their businesses have been redacted from the comments.