Clarifying Certain Existing Principles on Statement of Cash Flows
Last updated on May 21, 2014. 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 clarifying certain existing principles in Topic 230, Statement of Cash Flows, including providing additional guidance on how and what an entity should consider in determining the classification of certain cash flows. As part of the project, the staff will research potential additional disclosures that could result in increased relevance for users.
*Next StepsThe staff is currently performing additional research and outreach about what would comprise the clarifying guidance and how it would provide useful information in the application of the principles within Topic 230. The staff plans to discuss its findings with the Board at a future meeting.
*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 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. Specifically, constituents mentioned the following issues:
- Insurance proceeds
- Debt prepayment or extinguishment costs
- Classification of changes in restricted cash
- Zero coupon bonds
- Classification of dividends from equity method investees
- Determination of the predominance of cash flows
- Insurance proceeds from company-owned life insurance
- Classification of cash flows from securitizations accounted for under Topic 860, Transfers and Servicing.
At its April 28, 2014 meeting, the Board voted to add the project to its agenda.
*Contact InformationJenifer Wyss
Postgraduate Technical Assistant