Project Update

EITF Issue No. 15-F: Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments

Last updated on September 1, 2016. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Updated sections are indicated with an asterisk *)

This project update summarizes the project activities and decisions of the FASB (the Board). It was prepared by the staff and is for the information and convenience of the Board’s constituents. All decisions of the Board are tentative, may change at future Board meetings, and do not change current accounting and reporting requirements. Decisions of the Board become final only after extensive due process.

Due Process Documents
Decisions Reached at Last Meeting
EITF/Board Meeting Dates
Contact Information

Project Objective and Background

In November 1987, FASB issued FASB Statement No. 95, Statement of Cash Flows. Statement 95 was later codified in Topic 230, Statement of Cash Flows. The Board has received feedback from constituents indicating that there is diversity in practice regarding the application of Topic 230.

The staff’s research indicated that there was diversity in practice with respect to the classification of certain cash receipts and payments. The staff’s research also indicated that the primary reasons for the diversity in classification is the result of lack of specific accounting guidance and inconsistent application of the existing principles within Topic 230.

At its April 28, 2014 meeting, the Board voted to add a project to its agenda. The project, Clarifying Certain Existing Principles on Statement of Cash Flows, was intended to reduce diversity in practice in financial reporting by clarifying certain principles in Topic 230.

At its April 1, 2015 meeting, the Board decided that clarifying certain existing principles within Topic 230 would only incrementally reduce diversity in practice about the classification of cash receipts and cash payments. Therefore, the Board decided to have the EITF consider nine specific cash flow issues with the goal of reducing the existing diversity in practice on a timely basis.

The nine specific issues to be addressed by the EITF include the classification of cash flows related to:

Issue 1—Debt Prepayment or Debt Extinguishment Costs
Issue 2—Settlement of Zero-Coupon Debt Instruments and Other Debt Instruments with Coupon Interest Rate That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing
Issue 3—Contingent Consideration Payments Made after a Business Combination
Issue 4—Proceeds from the Settlement of Insurance Claims
Issue 5—Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies
Issue 6—Distributions Received from Equity Method Investees
Issue 7—Beneficial Interests in Securitization Transactions
Issue 8— Separately Identifiable Cash Flows and Application of the Predominance Principle
Issue 9—Restricted Cash

At its November 12, 2015 meeting, the EITF decided to address Restricted Cash in a separate EITF Issue. The Board approved this decision at its December 11, 2015 meeting. For more information please refer to EITF Issue No. 16-A: Restricted Cash.

* Due Process Documents

On January 29, 2016, the Board issued proposed Accounting Standards Update, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force). The comment deadline is March 29, 2016. On August 26, 2016, the Board completed this project with the issuance of Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.

Decisions Reached at Last Meeting (June 29, 2016)

The Board ratified the consensus-for-exposure reached at the November 12, 2015 EITF Meeting. The Board directed the staff to draft a proposed Accounting Standards Update reflecting the consensus-for-exposure for vote by written ballot. The Board decided to expose the proposed Update for Issue 15-F for public comment for a period of 60 days.

The Board also approved the EITF’s decision to address Restricted Cash in a separate EITF Issue.The Board ratified the consensus reached at the June 10, 2016 EITF Meeting. The Board directed the staff to draft a final Accounting Standards Update reflecting the consensus for vote by written ballot.

EITF/Board Meeting Dates

The EITF and Board meeting minutes are provided for the information and convenience of constituents who want to follow the EITF’s and Boards' deliberations. All of the conclusions reported are tentative and may be changed at future EITF or Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

June 29, 2016
Board Meeting
EITF Ratification Minutes
June 10, 2016
EITF Meeting
EITF Meeting Minutes
Issue Summary No. 1, Supplement No. 4
December 11, 2015
Board Meeting
EITF Ratification Minutes
November 12, 2015
EITF Meeting
EITF Meeting Minutes
Issue Summary No. 1, Supplement No. 2
Issue Summary No. 1, Supplement No. 3
September 17, 2015
EITF Meeting
EITF Meeting Minutes
Issue Summary
June 18, 2015
EITF Meeting
EITF Meeting Minutes
Issue Summary
May 14, 2015
EITF Education Session
EITF Education Session Slides EITF Issue 15-F
April 1, 2015
Board Meeting
Board Meeting—Discussion about the clarification of certain existing principles
April 28, 2014
Board Meeting
Board Meeting—Agenda prioritization meeting about whether to add a project to the Board’s agenda
April 23, 2014
Board Meeting
Education Session—Preliminary research and findings on specific cash flow classification issues within the statement of cash flows

Contact Information

Rob Moynihan
EITF Coordinator
rmoynihan@fasb.org

Jenifer Wyss
Project Manager
jjwyss@fasb.org

Jin Koo
Practice Fellow
jkoo@fasb.org

Andrew McClaskey
Postgraduate Technical Assistant
awmcclaskey@fasb.org

Aishat Akinwale
Postgraduate Technical Assistant
aakinwale@fasb.org