On the Radar — Statement of cash flows

Published on: 31 May 2022

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.


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