EITF Issue No. 15-F: Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments
Last updated on April 7, 2015. 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 *)
The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
The project is intended to reduce diversity in practice in financial reporting by providing classification guidance on certain cash receipts and cash payments.
*Next StepsThe EITF will deliberate issues related to this project at its next meeting on June 18, 2015.
*Board/Other Public Meeting DatesThe Board meeting minutes are provided for the information and convenience of constituents who want to follow the Boards' deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
|*April 1, 2015||Board Meeting—Discussion about the clarification of certain existing principles|
|April 28, 2014||Board Meeting—Agenda prioritization meeting about whether to add a project to the Board’s agenda|
|April 23, 2014||Education Session—Preliminary research and findings on specific cash flow classification issues within the statement of cash flows|
*Background InformationIn 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 Emerging Issues Task Force (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:
- Settlement of insurance claims
- Debt prepayment or extinguishment costs
- Restricted cash
- Settlement of zero coupon bonds
- Distributions received from equity method investees
- Settlement of life insurance contracts
- Contingent consideration payments made after a business combination
- Beneficial interests in securitization transactions
- Application of the predominance principle
*Contact InformationJennifer Hillenmeyer
Postgraduate Technical Assistant