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What’s on a cash flow statement? Where should it be recorded?

An article that David Katz posted to CFO.com on September 7, 2016 discussed the cash-flow statement and the seemingly vast confusion around its reporting from company to company. He discusses how there’s confusion around what is a cash inflow and cash ouflow and where it should be posted.

Read the whole article here: http://ww2.cfo.com/cash-flow/2016/09/cash-flow-clash/

To decrease confusion and simplify things the FASB (who in my personal opinion has a record for creating more confusion) issued an ASU update regarding how to handle eight specific cash flow items. Mr. Katz outline these specific ones in his article.

There are other cash flow items that create complications that the update didn’t address.

How do you determine if a cash receipt is an operating activity or a financing activity?

What affect will the items Katz outlines and FASB addresses have on your company’s financials?

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I read that piece and found/feel just like most FASB's, ASU's, etc., the number of firms that will be effected by both the FASB/ASU/outline are minimal at best.

I too, take the same opinion that the constant redefining of what is and isn't GAAP has done for the most part nothing for industry,creditors or investors.

If one doesn't understand the underlying GAAP, one still can't compare apples to apples.

What the standard boards have been successful in doing is adding new revenue streams to public CPA firms. IMHO, that is not why they were created nor what they should be doing.

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