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U.S. GAAP Codification Accounting Topics

Financial Reporting Guide

Principles of AccountingU.S. GAAP Financial Reporting Guide
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Section 2140: Statement of Cash Flows

[U.S. GAAP Codification Topic]
230 Statement of cash flows
230-10 Overall

[U.S. GAAP before the Codification]
SFAS 95, November 1987, Statement of Cash Flows
SFAS 102, February 1989, Statement of Cash Flows-Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale, an amendment of FASB Statement No. 95
SFAS 104, December 1989, Statement of Cash Flows-Net Reporting of Certain Cash Receipts and Cash Payments and Classification of Cash Flows from Hedging Transactions, an amendment of FASB Statement No. 95

1. Presentation of Cash Flows
(1) Statement of cash flows reports (A) by (B)
--> (A) net cash provided or used
--> (B) operating, investing and financing activities
(2) For operating activities, (C) is required to be presented
--> (C) Reconciliation of net income and net cash flow
(3) Presentation of "Cash Flow per Share" is not allowed

2. Types of Activities
(1) Operating activities
(2) Investing activities
(3) Financing activities

3. Operating Activities
(1) Cash received from sale of goods or services
(2) Cash paid to suppliers and employees
(3) Receipt of dividends
(4) Receipt of interests
(5) Payment of interests
(6) Receipt of insurance proceeds
(7) Income taxed paid

4. Investing Activities
(1) Acquisition of debt instruments of other entities
(2) Sale of debt instruments of other entities
(3) Acquisition of equity instruments of other entities
(4) Sale of equity instruments of other entities
(5) Acquisition of property, plant and equipment
(6) Sale of property, plant and equipment
(7) Capital expenditures
(8) Payment for purchase of another entity

5. Financing Activities
(1) Issuance of equity instruments
(2) Payment of dividends
(3) Repurchase of equity instruments
(4) Proceeds from short-term borrowings
(5) Repayment of short-term borrowings
(6) Proceeds from issuance of bonds and other long-term borrowings
(7) Repayment of bonds and other long-term borrowings

6. Reporting Operating Activities
(1) Direct method
(2) Indirect method
(3) Direct method is "encouraged"

7. Direct method reports (a), (b) and (c)
--> (a) major classes of gross cash receipts from operating activities
--> (b) major classes of gross cash payments for operating activities
--> (c) net cash flow from operating activities

8. Indirect method
Net cash from operating activities = Net income + (d)
--> (d) Adjustments from net income to net cash from operating activities

9. (d) includes the following:
(1) Add non-cash expenses
---> Example: depreciation and amortization

(2) Subtract gain on sale of property, plant and equipment
--> Gain on sale of property, plant and equipment is included
--> in cash flows form investing activities

(3) Decrease in non-cash current assets --> add
--> Example: collection of accounts receivable
--> decreases non-cash current assets, increases cash,

(4) Increase in current assets --> subtract
--> Example: purchase of inventories in cash
--> increases non-cash current assets, decreases cash

(5) Decrease in current liabilities --> subtract
--> Example: payment of accounts payable
--> decreases current liabilities, decreases cash

(6) Increase in current liabilities --> add
--> Example: increase in accounts payable
--> increases current liabilities, increases cash

Index of U.S. GAAP Financial Reporting Guide

U.S. GAAP by Codification Topics 
 105  GAAP Hierarchy 
 105  GAAP History 

 205  Presentation of Financial Statements 
 205-20 Discontinued Operations 
 210  Balance Sheet 
 210-20 Offsetting 
 220  Comprehensive Income 
 225  Income Statement 
 225-20 Extraordinary and Unusual Items 
 230  Statement of Cash Flows 
 250  Accounting Changes and Error Corrections 
 260  Earnings per Share 
 270  Interim Reporting
 310  Impairment of a Loan
 320  Investment Securities 
 320  Other-Than-Temporary Impairments, FSP FAS 115-2 
 320-10-05 Overview of Investments in Other Entities 
 320-10-35 Reclassification of Investments in Securities
 323-10 Equity Method Investments
 323-30 Investments in Partnerships and Joint Ventures 
 325-20 Cost Method Investments 
 330  Inventory

 340-20 Capitalized Advertising Costs 
 350-20 Goodwill 
 350-30 Intangibles Other than Goodwill 
 350-40 Internal-Use Software 
 350-50 Website Development Costs 
 360  Property, Plant and Equipment
 360-20 Real Estate Sales

 410  Asset Retirement and Environmental Obligations 
 420  Exit or Disposal Cost Obligations 
 450  Contingencies 
 450-20 Loss Contingencies 
 450-30 Gain Contingencies
 480  Redeemable Financial Instruments 

 505-20 Stock Dividends, Stock Splits 
 505-30 Treasury Stock 

 605  SEC Staff Accounting Bulletin, Topic 13 
 605-25 Revenue Recognition - Multiple Element Arrangements 
 715-30 Defined Benefit Plans - Pension
 718  Share-Based Payment 
 730  Research and Development 
 730-20 Research and Development Arrangements 

 805  Business Combinations  
 810  Consolidation 
 810  Noncontrolling Interests 
 810  Consolidation of Variable Interest Entities, SFAS 167 
 815  Derivatives and Hedging Overview 

 820  Fair Value Measurements  
 820  Fair value when the markets are not active, FSP FAS 157-4
 825  Fair Value Option 

 830  Foreign Currency Matters 
 830-20 Foreign Currency Transactions 
 830-30 Translation of Financial Statements 
 835  Interest 
 835-20 Capitalization of Interest 
 835-30 Imputation of Interest 

 840  Leases 
 840-20 Operating Leases 
 840-30 Capital Leases 
 840-40 Sale-Leaseback Transactions
 845  Nonmonetary Transactions 

 855  Subsequent Events 
 860-20 Sale of Financial Assets, SFAS 166 
 860-50 Servicing Assets and Liabilities, SFAS 156 

 985-20 Costs of software to be sold  

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