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FASB proposes guidance on certain cash flow classification issues

  • FASB document Image

Jan 29, 2016

The FASB has issued a proposed Accounting Standards Update (ASU), “Classification of Certain Cash Receipts and Cash Payments,” in response to the EITF consensus-for-exposure on Issue 15-F.

Specifically, the proposal addresses eight cash flow classification issues that have been creating diversity in practice:

  1. Debt prepayment or debt extinguishment costs.
  2. Settlement of zero-coupon bonds.
  3. Contingent consideration payments made after a business combination.
  4. Proceeds from the settlement of insurance claims.
  5. Proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies.
  6. Distributions received from equity method investees.
  7. Beneficial interests in securitization transactions.
  8. Separately identifiable cash flows and application of the predominance principle.

Com­ments on the pro­posal are due by March 29, 2016. For more in­for­ma­tion, see De­loitte’s Heads Up and November 2015 EITF Snapshot as well as the pro­posed ASU on the FASB’s Web site.

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