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New Cash Flow Statement Classification Guidance Issued

The Financial Accounting Standards Board has issued new guidance to address how specific cash receipts and payments are classified in cash flow statements. The amendments in Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, cover the following cash flow issues: Debt prepayment or debt extinguishment costs Settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant concerning the effective interest rate of the borrowing Contingent consideration payments made following a business combination Proceeds from the settlement of insurance claims Proceeds from the settlement. Read More.

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FASB Ratifies EITF Issue on Statement of Cash Flows

At its June 29 Board meeting, the Financial Accounting Standards Board (“FASB”) ratified the consensus reached at its June 10 Emerging Issues Task Force meeting regarding Issue No. 15-F, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.” In particular, the FASB reached a consensus on the following issues: Debt Prepayment or Debt Extinguishment Costs Settlement of Zero-Coupon Debt Instruments and Other Debt Instruments with Insignificant Coupon Interest Rates Contingent Consideration Payments Made after a Business Combination Proceeds from the Settlement of Insurance Claims Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance. Read More.

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Proposed Changes to Cash Flow Presentation Issued

The proposed Accounting Standards Update, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, was recently issued by the Financial Accounting Standards Board. Seeking to reduce the current diversity in practice in the presentation and classification of certain cash receipts and cash payments under Topic 230 and other Topics, the proposal addresses the following cash flow issues: Debt Prepayment or Debt Extinguishment Costs Settlement of Zero-Coupon Bonds Contingent Consideration Payments Made after a Business Combination Proceeds from the Settlement of Insurance Claims Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance. Read More.

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