GUIDANCE ABOUT RESTRICTED CASH IN

CASH FLOW STATEMENTSASU 2016-18

WHY THE NEW STANDARD?

DIVERSITY EXISTS IN THE

CLASSIFICATION AND

PRESENTATION OF CHANGES IN

RESTRICTED CASH

ENTITIES CLASSIFY TRANSFERS BETWEEN

CASH AND RESTRICTED CASH AS OPERATING,

INVESTING, OR FINANCING ACTIVITIES, OR AS A

COMBINATION OF THOSE ACTIVITIES

THE DIVERSITY CREATES CONFUSION

WHO IS AFFECTED?

THE AMENDMENTS IN THIS UPDATE

APPLY TO ALL ENTITIES THAT HAVE RESTRICTED CASH

OR RESTRICTED CASH EQUIVALENTS AND ARE

REQUIRED TO PRESENT A STATEMENT OF CASH FLOWS

WHAT ARE THE MAIN PROVISIONS?

REQUIRES THAT A STATEMENT OF CASH FLOWS

EXPLAIN THE CHANGE DURING THE PERIOD IN THE

TOTAL OF CASH, CASH EQUIVALENTS, AND AMOUNTS

GENERALLY DESCRIBED AS RESTRICTED CASH OR

RESTRICTED CASH EQUIVALENTS

RESTRICTED CASH IS INCLUDED IN THE DEFINITION

OF CASH

WHEN EFFECTIVE?

PUBLIC COMPANIES: YEARS BEGINNING AFTER

DECEMBER 15, 2017

OTHER ENTITIES: YEARS BEGINNING AFTER

DECEMBER 15, 2018

CAN BE EARLY IMPLEMENTED

DISCLOSURES

THE NATURE OF

RESTRICTIONS ON ITS CASH AND

CASH EQUIVALENTS

ON THE FACE OF THE CASH FLOW STATEMENT OR

IN THE NOTES, A DETAIL OF

BALANCE SHEET LINES COMPRISING THE

YEAR-END CASH TOTAL

Sample Disclosure

Cash and cash equivalents $12,500

Restricted cash - short term 3,000

Restricted cash - long term 10,000

Total cash, cash equivalents and restricted cash

Total per Cash Flow Statement

$25,500

CHARLES HALL, CPA, CFE, MACC

CPA-Scribo.com