# ASC 230-10: Statement of Cash Flows — Overall Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/230/10/) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:11:17.967Z to 2026-09-09T23:11:49.870Z Record version: sha256:f2ef28dadc1b5d9985fc3c3a7810baa35d2a22a07732415143bebb7b62e5a6ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10: Statement of Cash Flows — Overall ### Machine-generated study aids ```json { "summary": "ASC 230-10 governs the statement of cash flows, which every entity presenting both financial position and results of operations must provide for each period results of operations are presented (230-10-15-3). It requires cash receipts and payments to be classified as operating, investing, or financing activities and requires the statement to explain the change in the total of cash, cash equivalents, restricted cash, and restricted cash equivalents (230-10-45-4, 45-10, 45-24). Operating cash flows may be presented by the direct method (encouraged) or the indirect method, but a business entity must reconcile net income to net cash flow from operating activities either way (230-10-45-25, 45-28, 45-29).", "key_points": [ "Every business entity or NFP presenting both financial position and results of operations must present a statement of cash flows; limited exemptions exist for defined benefit pension plans under Topic 960 and for investment companies and similar funds meeting the Level 1/Level 2 fair value, little-or-no-debt, and statement of changes in net assets conditions (230-10-15-3, 15-4).", "Cash receipts and payments are classified as operating, investing, or financing; investing includes loans made and collected, purchases/sales of other entities' debt and equity instruments and PP&E (230-10-45-12, 45-13), financing includes issuing equity and debt, dividends and distributions to owners, debt repayments, debt issue costs, and debt prepayment/extinguishment costs (230-10-45-14, 45-15), and operating is the residual, including interest and dividends received and interest and income taxes paid (230-10-45-16, 45-17).", "The statement must reconcile the beginning and ending totals of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents; transfers among those items are not reported as cash flow activities (230-10-45-4, 45-5, 45-24).", "Gross reporting is the default, but net reporting is permitted for cash equivalents and for investments (other than cash equivalents), loans receivable, and debt with original maturities of three months or less, and for items where the entity is substantively holding or disbursing cash for customers (230-10-45-7 through 45-9).", "Financial statements shall not report cash flow per share (230-10-45-3).", "For receipts and payments with aspects of more than one class, apply specific guidance first, then separate by identifiable source or use based on the nature of the cash flows; if inseparable, classify based on the predominant source or use (230-10-45-22, 45-22A).", "Required disclosures include the cash equivalents policy (230-10-50-1), interest paid net of capitalized amounts (and income taxes paid) under the indirect method (230-10-50-2), all noncash investing and financing activities affecting recognized assets or liabilities (230-10-50-3, 50-4), the nature of restrictions on cash (230-10-50-7), and a reconciliation of balance sheet line items to the cash totals when presented in more than one line item (230-10-50-8)." ], "categories": [ "Presentation", "Cash flows", "Disclosure", "Financial statement presentation" ], "audience_level": "introductory", "student_note": "Classification questions dominate exams: know that interest and dividends received and interest paid are operating, dividends paid are financing, and capitalized interest on self-constructed assets is investing. A frequent misunderstanding is thinking the reconciliation of net income to operating cash flow is optional under the direct method — for business entities it is always required (230-10-45-29), and only NFPs using the direct method are excused.", "related_topics": [ "958-230", "830-230", "946-230", "942-230", "205-20", "235-10" ], "key_concepts": [ "operating investing and financing activities", "cash equivalents", "restricted cash", "direct method", "indirect method", "reconciliation of net income to operating cash flow", "noncash investing and financing activities", "predominance principle" ] } ``` Source downloaded (UTC): 2026-09-09T23:11:17.967Z to 2026-09-09T23:11:17.967Z Record version: sha256:ec50911b86cf1e0481fac7fb2d8254982bb3b040b5dc6994a607f7eca51e8cc8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/230/10/#00-status) SEC content: no ##### [230-10-00-1](https://asc.understandingaccounting.org/asc/230/10/#230-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:17.967Z to 2026-09-09T23:11:17.967Z Record version: sha256:165dc4fd760e5e9ddf527bb2ddf470029b0931d73e94feebf83a2be26301c663 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Board-Designated Endowment FundAddedAccounting Standards Update No. 2016-1408/18/2016
Conditional ContributionAddedAccounting Standards Update No. 2018-0806/21/2018
ContractAddedAccounting Standards Update No. 2016-0202/25/2016
ContributionAmendedAccounting Standards Update No. 2018-0806/21/2018
ContributionAddedAccounting Standards Update No. 2016-1408/18/2016
Donor-Imposed ConditionAddedAccounting Standards Update No. 2018-0806/21/2018
Donor-Imposed RestrictionAddedAccounting Standards Update No. 2016-1408/18/2016
Donor-Restricted Endowment FundAddedAccounting Standards Update No. 2016-1408/18/2016
Effective Interest RateAmendedAccounting Standards Update No. 2016-1912/14/2016
Effective Interest RateAddedAccounting Standards Update No. 2016-1508/26/2016
Endowment FundAddedAccounting Standards Update No. 2016-1408/18/2016
Fair Value (3rd def.)AddedAccounting Standards Update No. 2012-0410/01/2012
Financial Asset (1st def.)SupersededAccounting Standards Update No. 2016-1912/14/2016
Financial Asset (1st def.)AddedAccounting Standards Update No. 2012-0510/22/2012
Financial Asset (2nd def.)AddedAccounting Standards Update No. 2016-1912/14/2016
Funds Functioning as EndowmentAddedAccounting Standards Update No. 2016-1408/18/2016
Inherent ContributionAddedAccounting Standards Update No. 2016-1408/18/2016
LeaseAddedAccounting Standards Update No. 2016-0202/25/2016
Lease LiabilityAddedAccounting Standards Update No. 2016-0202/25/2016
Lease PaymentsAddedAccounting Standards Update No. 2016-0202/25/2016
Lease TermAddedAccounting Standards Update No. 2016-0202/25/2016
LesseeAddedAccounting Standards Update No. 2016-0202/25/2016
LessorAddedAccounting Standards Update No. 2016-0202/25/2016
Net AssetsAddedAccounting Standards Update No. 2016-1408/18/2016
Net Assets with Donor RestrictionsAddedAccounting Standards Update No. 2016-1408/18/2016
Net Assets without Donor RestrictionsAddedAccounting Standards Update No. 2016-1408/18/2016
Promise to GiveAddedAccounting Standards Update No. 2018-0806/21/2018
Public Business EntityAmendedMaintenance Update 2017-06 (PDF)04/07/2017
Public Business EntityAddedAccounting Standards Update No. 2016-1811/17/2016
Purchased Financial Assets with Credit DeteriorationAmendedAccounting Standards Update No. 2016-1912/14/2016
Purchased Financial Assets with Credit DeteriorationAddedAccounting Standards Update No. 2016-1508/26/2016
Right-of-Use AssetAddedAccounting Standards Update No. 2016-0202/25/2016
Underlying AssetAddedAccounting Standards Update No. 2016-0202/25/2016
230-10-05-3AmendedAccounting Standards Update No. 2014-1006/10/2014
230-10-15-4AmendedAccounting Standards Update No. 2015-0705/01/2015
230-10-15-4AmendedAccounting Standards Update No. 2013-0806/07/2013
230-10-15-4AmendedAccounting Standards Update No. 2012-0410/01/2012
230-10-45-4AmendedAccounting Standards Update No. 2016-1811/17/2016
230-10-45-5AmendedAccounting Standards Update No. 2016-1811/17/2016
230-10-45-11 through 45-13
AmendedAccounting Standards Update No. 2016-0101/05/2016
230-10-45-12AmendedAccounting Standards Update No. 2012-0510/22/2012
230-10-45-12AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-45-13AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-45-14AmendedAccounting Standards Update No. 2016-1408/18/2016
230-10-45-14AmendedAccounting Standards Update No. 2016-0903/30/2016
230-10-45-15 through 45-17
AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-45-15AmendedAccounting Standards Update No. 2018-0706/20/2018
230-10-45-15AmendedAccounting Standards Update No. 2016-0903/30/2016
230-10-45-17AmendedAccounting Standards Update No. 2016-1408/18/2016
230-10-45-17AmendedAccounting Standards Update No. 2016-0903/30/2016
230-10-45-19AmendedAccounting Standards Update No. 2016-0101/05/2016
230-10-45-20AmendedAccounting Standards Update No. 2015-1006/12/2015
230-10-45-21AmendedAccounting Standards Update No. 2016-1306/16/2016
230-10-45-21AmendedAccounting Standards Update No. 2016-0101/05/2016
230-10-45-21AmendedAccounting Standards Update No. 2012-0410/01/2012
230-10-45-21AAmendedAccounting Standards Update No. 2023-0812/13/2023
230-10-45-21AAmendedAccounting Standards Update No. 2016-1912/14/2016
230-10-45-21AAddedAccounting Standards Update No. 2012-0510/22/2012
230-10-45-21B through 45-21D
AddedAccounting Standards Update No. 2016-1508/26/2016
230-10-45-22AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-45-22AAddedAccounting Standards Update No. 2016-1508/26/2016
230-10-45-24AmendedAccounting Standards Update No. 2016-1811/17/2016
230-10-45-24AmendedAccounting Standards Update No. 2015-0101/09/2015
230-10-45-24AmendedAccounting Standards Update No. 2014-0804/10/2014
230-10-45-24AAddedAccounting Standards Update No. 2014-0804/10/2014
230-10-45-25AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-45-25AmendedAccounting Standards Update No. 2016-0903/30/2016
230-10-45-27AAmendedAccounting Standards Update No. 2023-0812/13/2023
230-10-45-28AmendedMaintenance Update 2014-20 (PDF)09/29/2014
230-10-45-28AmendedAccounting Standards Update No. 2010-0802/02/2010
230-10-45-29AmendedAccounting Standards Update No. 2016-1408/18/2016
230-10-45-30AmendedAccounting Standards Update No. 2016-1408/18/2016
230-10-50-2AmendedAccounting Standards Update No. 2023-0912/14/2023
230-10-50-2AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-50-2AAddedAccounting Standards Update No. 2023-0912/14/2023
230-10-50-4AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-50-4AmendedAccounting Standards Update No. 2016-0202/25/2016
230-10-50-7AmendedMaintenance Update 2021-09 (PDF)08/20/2021
230-10-50-7AddedAccounting Standards Update No. 2016-1811/17/2016
230-10-50-8AmendedMaintenance Update 2021-09 (PDF)08/20/2021
230-10-50-8AddedAccounting Standards Update No. 2016-1811/17/2016
230-10-50-9AddedAccounting Standards Update No. 2023-0610/09/2023
230-10-55-10AmendedAccounting Standards Update No. 2016-1811/17/2016
230-10-55-10AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-55-10AmendedAccounting Standards Update No. 2016-0202/25/2016
230-10-55-11AmendedAccounting Standards Update No. 2016-0202/25/2016
230-10-55-12AAddedAccounting Standards Update No. 2016-1811/17/2016
230-10-55-13AmendedAccounting Standards Update No. 2016-1811/17/2016
230-10-55-13AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-55-13AmendedAccounting Standards Update No. 2016-0202/25/2016
230-10-55-14AmendedAccounting Standards Update No. 2023-0912/14/2023
230-10-55-15AmendedAccounting Standards Update No. 2016-0202/25/2016
230-10-55-18AAddedAccounting Standards Update No. 2016-1811/17/2016
230-10-55-19AmendedAccounting Standards Update No. 2016-1811/17/2016
230-10-55-19AmendedAccounting Standards Update No. 2016-0202/25/2016
230-10-55-20AmendedAccounting Standards Update No. 2016-1811/17/2016
230-10-55-20AmendedAccounting Standards Update No. 2016-1508/26/2016
230-10-55-20AmendedAccounting Standards Update No. 2016-0202/25/2016
230-10-60-2AmendedAccounting Standards Update No. 2016-0101/05/2016
230-10-60-2AAddedAccounting Standards Update No. 2016-0101/05/2016
230-10-60-5SupersededAccounting Standards Update No. 2014-1006/10/2014
230-10-65-1AddedAccounting Standards Update No. 2012-0510/22/2012
230-10-65-2AddedAccounting Standards Update No. 2016-1508/26/2016
230-10-65-3AddedAccounting Standards Update No. 2016-1811/17/2016
Source downloaded (UTC): 2026-09-09T23:11:21.017Z to 2026-09-09T23:11:21.017Z Record version: sha256:8ec15521d7ef0eba281869e2b8c02755f1c5dca0c16fd226c15977814e8be43b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/230/10/#05-overview-and-background) SEC content: no ##### [230-10-05-1](https://asc.understandingaccounting.org/asc/230/10/#230-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:21.017Z to 2026-09-09T23:11:21.017Z Record version: sha256:74415406678aeb8cafaac54637c9caeaa0583ba5f67bb2709152fcf3d37caa63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Statement of [Cash](https://asc.understandingaccounting.org/glossary/c/#cash "Consistent with common usage, cash includes not only currency on hand but demand deposits with banks or other financial institutions. Cash also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. All charges and credits to those accounts are cash receipts or payments to both the entity owning the account and the bank holding it. For example, a bank's granting of a loan by crediting the proceeds to a customer's demand deposit account is a cash payment by the bank and a cash receipt of the customer when the entry is made.") Flows Topic presents standards for reporting cash flows in general-purpose financial statements. ##### [230-10-05-2](https://asc.understandingaccounting.org/asc/230/10/#230-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:21.017Z to 2026-09-09T23:11:21.017Z Record version: sha256:a0982f52b8cfbd5fcb302f2963811bf130719c27803291ae44ed345e06ffe5c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Specific guidance is provided on all of the following: 1. a Classifying in the statement of cash flows of cash receipts and payments as either [operating activities](https://asc.understandingaccounting.org/glossary/o/#operating-activities "Operating activities include all transactions and other events that are not defined as investing or financing activities (see paragraphs 230-10-45-12230-10-45-13230-10-45-14230-10-45-15). Operating activities generally involve producing and delivering goods and providing services. Cash flows from operating activities are generally the cash effects of transactions and other events that enter into the determination of net income."), [investing activities](https://asc.understandingaccounting.org/glossary/i/#investing-activities "Investing activities include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets, that is, assets held for or used in the production of goods or services by the entity (other than materials that are part of the entity's inventory). Investing activities exclude acquiring and disposing of certain loans or other debt or equity instruments that are acquired specifically for resale, as discussed in paragraphs 230-10-45-12 and 230-10-45-21."), or [financing activities](https://asc.understandingaccounting.org/glossary/f/#financing-activities "Financing activities include obtaining resources from owners and providing them with a return on, and a return of, their investment; receiving restricted resources that by donor stipulation must be used for long-term purposes; borrowing money and repaying amounts borrowed, or otherwise settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.") 2. b Applying the direct method and the indirect method of reporting cash flows 3. c Presenting the required information about noncash investing and financing activity and other events 4. d Classifying cash receipts and payments related to hedging activities. ##### [230-10-05-3](https://asc.understandingaccounting.org/asc/230/10/#230-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:21.017Z to 2026-09-09T23:11:21.017Z Record version: sha256:0aaf2bfef0552f2af770290c581da8b8af61e680895db35c4926d2d8d745c01a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other Topics, including industry-specific Topics, may have Statement of Cash Flows Subtopics that address the Topic-specific requirements for the statement of cash flows. The guidance in those Subtopics is intended to be incremental to the guidance otherwise established in this Statement of Cash Flows Topic. Topics with incremental Statement of Cash Flows Subtopics are: 1. a Foreign Currency Matters, Subtopic 830-230 2. b [Subparagraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). 3. c Entertainment—Films, Subtopic 926-230 4. d Financial Services—Depository and Lending, Subtopic 942-230 5. e Financial Services—Investment Companies, Subtopic 946-230 6. f Not-for-Profit Entities, Subtopic 958-230 7. g Real Estate—General, Subtopic 970-230 8. h Real Estate—Time Sharing Activities, Subtopic 978-230. Source downloaded (UTC): 2026-09-09T23:11:24.518Z to 2026-09-09T23:11:24.518Z Record version: sha256:f2b11e361a4f2ccdbd195461c9aeb2c2a9374b88cd1d67d15f4df83e5f0f59be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/230/10/#10-objectives) SEC content: no ##### [230-10-10-1](https://asc.understandingaccounting.org/asc/230/10/#230-10-10-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:24.518Z to 2026-09-09T23:11:24.518Z Record version: sha256:aa44c0060235cd01a208b6c8bde76e93012652f97a70bef725c8bafcdeca1a84 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The primary objective of a statement of cash flows is to provide relevant information about the [cash](https://asc.understandingaccounting.org/glossary/c/#cash "Consistent with common usage, cash includes not only currency on hand but demand deposits with banks or other financial institutions. Cash also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. All charges and credits to those accounts are cash receipts or payments to both the entity owning the account and the bank holding it. For example, a bank's granting of a loan by crediting the proceeds to a customer's demand deposit account is a cash payment by the bank and a cash receipt of the customer when the entry is made.") receipts and cash payments of an entity during a period. ##### [230-10-10-2](https://asc.understandingaccounting.org/asc/230/10/#230-10-10-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:24.518Z to 2026-09-09T23:11:24.518Z Record version: sha256:122241302caf485796008210345bedbeef60ef26afdfbf10e08a665bb9e9d145 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The information provided in a statement of cash flows, if used with related disclosures and information in the other financial statements, should help investors, creditors, and others (including donors) to do all of the following: 1. a Assess the entity's ability to generate positive future net cash flows 2. b Assess the entity's ability to meet its obligations, its ability to pay dividends, and its needs for external financing 3. c Assess the reasons for differences between net income and associated cash receipts and payments 4. d Assess the effects on an entity's financial position of both its cash and noncash investing and financing transactions during the period. Source downloaded (UTC): 2026-09-09T23:11:26.603Z to 2026-09-09T23:11:26.603Z Record version: sha256:3f9765e6be7ae6fd3610ad37a898b2469e77aa0b4c30358a217b8408bf2877db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/230/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [230-10-15-1](https://asc.understandingaccounting.org/asc/230/10/#230-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:26.603Z to 2026-09-09T23:11:26.603Z Record version: sha256:e219368abf15b5a0bc6d2a4800f48127897cd49eebc5e7fac109e2bfc1b2f46f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Scope Section of the Overall Subtopic establishes the pervasive scope for the Statement of Cash Flows Topic. #### Entities ##### [230-10-15-2](https://asc.understandingaccounting.org/asc/230/10/#230-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:26.603Z to 2026-09-09T23:11:26.603Z Record version: sha256:9c3573e0f0c1401e6d2cea375f16bfb2b3d91fbd9266f54f93c0edd9e1147443 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Statement of Cash Flows Topic applies to all entities, including both business entities and not-for-profit entities (NFPs), with specific exceptions noted below. The phrase _investors, creditors, and others_ includes donors. The terms _income statement_ and _net income_ apply to a business entity; the terms _statement of activities_ and _change in net assets_ apply to an NFP. ##### [230-10-15-3](https://asc.understandingaccounting.org/asc/230/10/#230-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:26.603Z to 2026-09-09T23:11:26.603Z Record version: sha256:89d987dd867fb33ea44a92bd686e69cdc069f65a70ef80a27f7f79c160dc915f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A business entity or NFP that provides a set of financial statements that reports both financial position and results of operations shall also provide a statement of cash flows for each period for which results of operations are provided. ##### [230-10-15-4](https://asc.understandingaccounting.org/asc/230/10/#230-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:26.603Z to 2026-09-09T23:11:26.603Z Record version: sha256:8d22f4a58ab7697e2b96d51e72f4d204991dbaefc2ea68440c372fa8ae4192f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic does not apply to the following entities: 1. a A statement of cash flows is not required to be provided by a defined benefit pension plan that presents financial information in accordance with the provisions of Topic 960. Other employee benefit plans that present financial information similar to that required by Topic 960 (including the presentation of plan investments at fair value) also are not required to provide a statement of cash flows. Employee benefit plans are encouraged to include a statement of cash flows with their annual financial statements when that statement would provide relevant information about the ability of the plan to meet future obligations (for example, when the plan invests in assets that are not highly liquid or obtains financing for investments). 2. b Provided that the conditions in (c) are met, a statement of cash flows is not required to be provided by the following entities: 1. 1 An investment company within the scope of Topic 946 on investment companies 2. 2 [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 3. 3 A common trust fund, variable annuity account, or similar fund maintained by a bank, insurance entity, or other entity in its capacity as a trustee, administrator, or guardian for the collective investment and reinvestment of funds. 3. c For an investment company specified in (b) to be exempt from the requirement to provide a statement of cash flows, all of the following conditions must be met: 1. 1 [Subparagraph superseded by Accounting Standards Update No. 2013-08](https://asc.understandingaccounting.org/updates/asu-2013-08/). 2. 2 During the period, substantially all of the entity's investments were carried at [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") and classified in accordance with Topic 820 as Level 1 or Level 2 measurements or were measured using the practical expedient in paragraph [820-10-35-59](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-59) to determine their fair values and are redeemable in the near term at all times. 3. 3 The entity had little or no debt, based on the average debt outstanding during the period, in relation to average total assets. For the purpose of determining average debt outstanding, obligations resulting from redemptions of shares by the entity from unsettled purchases of securities or similar assets, or from covered options written generally may be excluded. However, any extension of credit by the seller that is not in accordance with standard industry practices for redeeming shares or for settling purchases of investments shall be included in average debt outstanding. 4. 4 The entity provides a statement of changes in net assets. Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:bc8dff4ece4998e49aab8f0b243179d40115952a5bbf94a1aa455a7ab71e82ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/230/10/#45-other-presentation-matters) SEC content: no #### Form and Content ##### [230-10-45-1](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:a63aabaaba1f4fdb526993d909f0ca5a02ed7ef5c611c3792bb3480233bd0010 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A statement of [cash](https://asc.understandingaccounting.org/glossary/c/#cash "Consistent with common usage, cash includes not only currency on hand but demand deposits with banks or other financial institutions. Cash also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. All charges and credits to those accounts are cash receipts or payments to both the entity owning the account and the bank holding it. For example, a bank's granting of a loan by crediting the proceeds to a customer's demand deposit account is a cash payment by the bank and a cash receipt of the customer when the entry is made.") flows shall report the cash effects during a period of an entity's operations, its investing transactions, and its financing transactions. ##### [230-10-45-2](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:e2b57a2082d23fc0c572a6741a6ed63c0c4dfe00af64ad2a49333467e17d3602 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A reconciliation of net income and net cash flow from [operating activities](https://asc.understandingaccounting.org/glossary/o/#operating-activities "Operating activities include all transactions and other events that are not defined as investing or financing activities (see paragraphs 230-10-45-12230-10-45-13230-10-45-14230-10-45-15). Operating activities generally involve producing and delivering goods and providing services. Cash flows from operating activities are generally the cash effects of transactions and other events that enter into the determination of net income."), which generally provides information about the net effects of operating transactions and other events that affect net income and operating cash flows in different periods, also shall be provided. ##### [230-10-45-3](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:728b2f585259bff0ab0a571148b97ded9238c5ec48fccb8061385325b4a9d7c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Financial statements shall not report an amount of cash flow per share. Neither cash flow nor any component of it is an alternative to net income as an indicator of an entity's performance, as reporting per-share amounts might imply. Reporting a contractually determined per-unit amount, such as a per unit amount of cash flow distributable under the terms of a partnership agreement or other agreement between an entity and its owners, is not the same as reporting a cash flow per-share amount intended to provide information useful to all investors and creditors and thus is not precluded by this Subtopic. ##### [230-10-45-4](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:e84fa39a55e5e3a972cea61fdda4a77f88a2a2a7737d20e61b721bf59b4af05b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A statement of cash flows shall explain the change during the period in the total of cash, [cash equivalents](https://asc.understandingaccounting.org/glossary/c/#cash-equivalents "Cash equivalents are short-term, highly liquid investments that have both of the following characteristics: Readily convertible to known amounts of cash So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month U.S. Treasury bill and a three-year U.S. Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Examples of items commonly considered to be cash equivalents are Treasury bills, commercial paper, money market funds, and federal funds sold (for an entity with banking operations)."), and amounts generally described as restricted cash or restricted cash equivalents. The statement shall use descriptive terms such as cash or cash and cash equivalents rather than ambiguous terms such as funds. When cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents are presented in more than one line item within the statement of financial position, an entity shall provide the disclosures required in paragraph [230-10-50-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-8). ##### [230-10-45-5](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:7cf4254c66494b2727cbf482cf70773bdcf22c4c4bde7de4216acac955219df9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash purchases and sales of items commonly considered to be cash equivalents generally are part of the entity's cash management activities rather than part of its operating, investing, and [financing activities](https://asc.understandingaccounting.org/glossary/f/#financing-activities "Financing activities include obtaining resources from owners and providing them with a return on, and a return of, their investment; receiving restricted resources that by donor stipulation must be used for long-term purposes; borrowing money and repaying amounts borrowed, or otherwise settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit."), and details of those transactions need not be reported in a statement of cash flows. In addition, transfers between cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents are not part of the entity's operating, investing, and financing activities, and details of those transfers are not reported as cash flow activities in the statement of cash flows. ##### [230-10-45-6](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:0b90d76e2042ec4e2dc8c21586e31ebad23cfa188d027b4b6a000021f623fcc1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not all investments that qualify are required to be treated as cash equivalents. An entity shall establish a policy concerning which short-term, highly liquid investments that satisfy the definition of cash equivalents are treated as cash equivalents. For example, an entity having banking operations might decide that all investments that qualify except for those purchased for its trading account will be treated as cash equivalents, while an entity whose operations consist largely of investing in short-term, highly liquid investments might decide that all those items will be treated as investments rather than cash equivalents. ##### [230-10-45-7](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:40539fd22eb45f19f5d6c921442fdf236f22eb13643fa8668e049049416dfa87 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Generally, information about the gross amounts of cash receipts and cash payments during a period is more relevant than information about the net amounts of cash receipts and payments. However, the net amount of related receipts and payments provides sufficient information not only for cash equivalents, as noted in paragraph [230-10-45-5](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-5), but also for certain other classes of cash flows specified in paragraphs [230-10-45-8 through 45-9](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-8) and paragraph [230-10-45-28](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-28). ##### [230-10-45-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:896f9ec401842d9dab467051ba9b0946c787512337e37da5f9464c41de41ea16 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For certain items, the turnover is quick, the amounts are large, and the maturities are short. For certain other items, such as demand deposits of a bank and customer accounts payable of a broker-dealer, the entity is substantively holding or disbursing cash on behalf of its customers. Only the net changes during the period in assets and liabilities with those characteristics need be reported because knowledge of the gross cash receipts and payments related to them may not be necessary to understand the entity's operating, investing, and financing activities. ##### [230-10-45-9](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:4fe6d5286ae48bc78feac7975fec61a4376d86bd56a066466d6685322d75635b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Providing that the original maturity of the asset or liability is three months or less, cash receipts and payments pertaining to any of the following qualify for net reporting for the reasons stated in the preceding paragraph: 1. a Investments (other than cash equivalents) 2. b Loans receivable 3. c Debt. For purposes of this paragraph, amounts due on demand are considered to have maturities of three months or less. For convenience, credit card receivables of financial services operations—generally, receivables resulting from cardholder charges that may, at the cardholder's option, be paid in full when first billed, usually within one month, without incurring interest charges and that do not stem from the entity's sale of goods or services—also are considered to be loans with original maturities of three months or less. #### Classification ##### [230-10-45-10](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:2596b84109277982a85e261e6bb261ae1bd83e71d3b9131c83eb718046907c41 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A statement of cash flows shall classify cash receipts and cash payments as resulting from investing, financing, or operating activities. ##### [230-10-45-11](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:23cda495a2019795a8f8e47472c0535d39df47b205ea0a04a806f019b6d020e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash flows from purchases, sales, and maturities of available-for-sale debt securities shall be classified as cash flows from [investing activities](https://asc.understandingaccounting.org/glossary/i/#investing-activities "Investing activities include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets, that is, assets held for or used in the production of goods or services by the entity (other than materials that are part of the entity's inventory). Investing activities exclude acquiring and disposing of certain loans or other debt or equity instruments that are acquired specifically for resale, as discussed in paragraphs 230-10-45-12 and 230-10-45-21.") and reported gross in the statement of cash flows. ##### [230-10-45-12](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:bed31b7d820dd2f18f7919a9ebfb61dd06c616885bfb00233dc287775917c305 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are cash inflows from investing activities: 1. a Receipts from collections or sales of loans made by the entity and of other entities' debt instruments (other than cash equivalents, certain debt instruments that are acquired specifically for resale as discussed in paragraph [230-10-45-21](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21), and certain donated debt instruments received by not-for-profit entities (NFPs) as discussed in paragraph [230-10-45-21A](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21A)) and collections on a transferor's beneficial interests in a securitization of the transferor's trade receivables 2. b Receipts from sales of equity instruments of other entities (other than certain equity instruments carried in a trading account as described in paragraph [230-10-45-18](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-18)and certain donated equity instruments received by NFPs as discussed in paragraph [230-10-45-21A](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21A)) and from returns of investment in those instruments 3. c Receipts from sales of property, plant, and equipment and other productive assets 4. d [Subparagraph not used](https://asc.understandingaccounting.org/updates/asu-2016-01/). 5. e Receipts from sales of loans that were not specifically acquired for resale. That is, if loans were acquired as investments, cash receipts from sales of those loans shall be classified as investing cash inflows regardless of a change in the purpose for holding those loans. For purposes of this paragraph, receipts from disposing of loans, debt or equity instruments, or property, plant, and equipment include directly related proceeds of insurance settlements, such as the proceeds of insurance on a building that is damaged or destroyed. ##### [230-10-45-13](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:23d605dc6ee64c21dff02de4f40152dfa33c592a47cab8cf3e63b9e5ce755cf9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are cash outflows for investing activities: 1. a Disbursements for loans made by the entity and payments to acquire debt instruments of other entities (other than cash equivalents and certain debt instruments that are acquired specifically for resale as discussed in paragraph [230-10-45-21](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21)). 2. b Payments to acquire equity instruments of other entities (other than certain equity instruments carried in a trading account as described in paragraph [230-10-45-18](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-18)). 3. c Payments at the time of purchase or soon before or after purchase to acquire property, plant, and equipment and other productive assets, including interest capitalized as part of the cost of those assets. Generally, only advance payments, the down payment, or other amounts paid at the time of purchase or soon before or after purchase of property, plant, and equipment and other productive assets are investing cash outflows. However, incurring directly related debt to the seller is a financing transaction (see paragraphs [230-10-45-14 through 45-15](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-14) ), and subsequent payments of principal on that debt thus are financing cash outflows. 4. d Payments made soon after the acquisition date of a business combination by an acquirer to settle a contingent consideration liability. ##### [230-10-45-14](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-14) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:a14739f484f3be855a57763423bc83090734fb8bfa3bedf8d0626c51dcda456a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are cash inflows from financing activities: 1. a Proceeds from issuing equity instruments 2. b Proceeds from issuing bonds, mortgages, notes, and from other short- or long-term borrowing 3. c Receipts from [contributions](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") and investment income that by donor stipulation are restricted for the purposes of acquiring, constructing, or improving property, plant, equipment, or other long-lived assets or establishing or increasing a [donor-restricted endowment fund](https://asc.understandingaccounting.org/glossary/d/#donor-restricted-endowment-fund "An endowment fund that is created by a donor stipulation (donors include other types of contributors, including makers of certain grants) requiring investment of the gift in perpetuity or for a specified term. Some donors or laws may require that a portion of income, gains, or both be added to the gift and invested subject to similar restrictions. The term does not include a Board-Designated Endowment Fund. See Endowment Fund.") 4. d Proceeds received from derivative instruments that include financing elements at inception, whether the proceeds were received at inception or over the term of the derivative instrument, other than a financing element inherently included in an at-the-market derivative instrument with no prepayments 5. e [Subparagraph superseded by Accounting Standards Update No. 2016-09](https://asc.understandingaccounting.org/updates/asu-2016-09/). ##### [230-10-45-15](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-15) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:5a8818bd0c8ecd8e3d05ebbcd8edee715744ace1312378c46714fe26e9fbcd9d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are cash outflows for financing activities: 1. a Payments of dividends or other distributions to owners, including outlays to reacquire the entity's equity instruments. Cash paid to a tax authority by a grantor when withholding shares from a grantee's award for tax-withholding purposes shall be considered an outlay to reacquire the entity's equity instruments. 2. b Repayments of amounts borrowed, including the portion of the repayments made to settle zero-coupon debt instruments that is attributable to the principal or the portion of the repayments made to settle other debt instruments with coupon interest rates that are insignificant in relation to the [effective interest rate](https://asc.understandingaccounting.org/glossary/e/#effective-interest-rate "The rate of return implicit in the financial asset, that is, the contractual interest rate adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition of the financial asset. For purchased financial assets with credit deterioration, however, to decouple interest income from credit loss recognition, the premium or discount at acquisition excludes the discount embedded in the purchase price that is attributable to the acquirer's assessment of credit losses at the date of acquisition.") of the borrowing that is attributable to the principal. 3. c Other principal payments to creditors who have extended long-term credit. See paragraph [230-10-45-13(c)](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-13), which indicates that most principal payments on seller-financed debt directly related to a purchase of property, plant, and equipment or other productive assets are financing cash outflows. 4. d Distributions to counterparties of derivative instruments that include financing elements at inception, other than a financing element inherently included in an at-the-market derivative instrument with no prepayments. The distributions may be either at inception or over the term of the derivative instrument. 5. e Payments for debt issue costs. 6. f Payments, or the portion of the payments, not made soon after the acquisition date of a business combination by an acquirer to settle a contingent consideration liability up to the amount of the contingent consideration liability recognized at the acquisition date, including measurement-period adjustments, less any amounts paid soon after the acquisition date to settle the contingent consideration liability. See also paragraph [230-10-45-17(ee)](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-17). 7. g Payments for debt prepayment or debt extinguishment costs, including third-party costs, premiums paid, and other fees paid to lenders that are directly related to the debt prepayment or debt extinguishment, excluding accrued interest. ##### [230-10-45-16](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-16) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:792a9ac56cf4953cf54aa973b52bfbaf76abba78e0bee22b22abd9dca4f8f1e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are cash inflows from operating activities: 1. a Cash receipts from sales of goods or services, including receipts from collection or sale of accounts and both short- and long-term notes receivable from customers arising from those sales. The term _goods_ includes certain loans and other debt and equity instruments of other entities that are acquired specifically for resale, as discussed in paragraph [230-10-45-21](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21). 2. b Cash receipts from returns on loans, other debt instruments of other entities, and equity securities—interest and dividends. 3. c All other cash receipts that do not stem from transactions defined as investing or financing activities, such as amounts received to settle lawsuits and refunds from suppliers. ##### [230-10-45-17](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-17) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:bfd3f1717c472581d48db982375b11589508d85119060deec5ae132a5e1d93bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following are cash outflows for operating activities: 1. a Cash payments to acquire materials for manufacture or goods for resale, including principal payments on accounts and both short- and long-term notes payable to suppliers for those materials or goods. The term _goods_ includes certain loans and other debt and equity instruments of other entities that are acquired specifically for resale, as discussed in paragraph [230-10-45-21](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21). 2. b Cash payments to other suppliers and employees for other goods or services. 3. c Cash payments to governments for taxes, duties, fines, and other fees or penalties. 4. d Cash payments to lenders and other creditors for interest, including the portion of the payments made to settle zero-coupon debt instruments that is attributable to accreted interest related to the debt discount or the portion of the payments made to settle other debt instruments with coupon interest rates that are insignificant in relation to the [effective interest rate](https://asc.understandingaccounting.org/glossary/e/#effective-interest-rate "The rate of return implicit in the financial asset, that is, the contractual interest rate adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition of the financial asset. For purchased financial assets with credit deterioration, however, to decouple interest income from credit loss recognition, the premium or discount at acquisition excludes the discount embedded in the purchase price that is attributable to the acquirer's assessment of credit losses at the date of acquisition.") of the borrowing that is attributable to accreted interest related to the debt discount. For all other debt instruments, an issuer shall not bifurcate cash payments to lenders and other creditors at settlement for amounts attributable to accreted interest related to the debt discount, nor classify such amounts as cash outflows for operating activities. 5. e Cash payment made to settle an asset retirement obligation. 6. ee Cash payments, or the portion of the payments, not made soon after the acquisition date of a business combination by an acquirer to settle a contingent consideration liability that exceed the amount of the contingent consideration liability recognized at the acquisition date, including measurement-period adjustments, less any amounts paid soon after the acquisition date to settle the contingent consideration liability. See also paragraph [230-10-45-15(f)](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-15). 7. f All other cash payments that do not stem from transactions defined as investing or financing activities, such as payments to settle lawsuits, cash [contributions](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") to charities, and cash refunds to customers. ##### [230-10-45-18](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-18) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:5db8ed559f0ef06ccf3a9026c4644e97c3ad9d66381eab8d3c9f4a6ffb7fc663 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Banks, brokers and dealers in securities, and other entities may carry securities and other assets in a trading account. Characteristics of trading account activities are described in Topics 255 and 940. ##### [230-10-45-19](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-19) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:8e75801d866b56a76ee55fffb1a710e47cd9f18fedbe45a61a9d52ae434ec5ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash receipts and cash payments resulting from purchases and sales of securities classified as trading debt securities accounted for in accordance with Topic 320and equity securities accounted for in accordance with Topic 321shall be classified pursuant to this Topic based on the nature and purpose for which the securities were acquired. ##### [230-10-45-20](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-20) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:bc8720f94766a826c4c30df9baa360f13ece3a605c2a5d94a7e9df6e47489458 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash receipts and cash payments resulting from purchases and sales of other securities and other assets shall be classified as operating cash flows if those assets are acquired specifically for resale and are carried at [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") in a trading account. ##### [230-10-45-21](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:55b181aa779eec9a88ec4d3e362b6750d06aa78c50ec8edcefc16e1ac1d8e12b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some loans are similar to debt securities in a trading account in that they are originated or purchased specifically for resale and are held for short periods of time. Cash receipts and cash payments resulting from acquisitions and sales of loans also shall be classified as operating cash flows if those loans are acquired specifically for resale and are carried at fair value or at the lower of amortized cost basis or fair value. For example, mortgage loans held for sale are required to be reported at the lower of amortized cost basis or fair value in accordance with Topic 948. ##### [230-10-45-21A](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21A) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:9e4a84a491bf3b8554485257dd5d2ca9c8c6f0e308054d7dc64b3953ea715a88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash receipts resulting from the sale of donated [financial assets](https://asc.understandingaccounting.org/glossary/f/#financial-asset "Cash, evidence of an ownership interest in an entity, or a contract that conveys to one entity a right to do either of the following: Receive cash or another financial instrument from a second entity Exchange other financial instruments on potentially favorable terms with the second entity.") (for example, donated debt or equity instruments) or crypto assets accounted for in accordance with Subtopic 350-60by NFPs that upon receipt were directed without any NFP-imposed limitations for sale and were converted nearly immediately into cash shall be classified as operating cash flows. If, however, the donor restricted the use of the contributed resource to a long-term purpose of the nature of those described in paragraph [230-10-45-14(c)](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-14), then those cash receipts meeting all the conditions in this paragraph shall be classified as a financing activity. ##### [230-10-45-21B](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21B) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:f3ff069fac9c78f944e0cd96b0e12d3deda66b4c02ac97d146990ca0ead2e9a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash receipts resulting from the settlement of insurance claims, excluding proceeds received from corporate-owned life insurance policies and bank-owned life insurance policies, shall be classified on the basis of the related insurance coverage (that is, the nature of the loss). For insurance proceeds that are received in a lump-sum settlement, an entity shall determine the classification on the basis of the nature of each loss included in the settlement. ##### [230-10-45-21C](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21C) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:deea448a8b067220d61177881c9e5d5f8546dbf4356419e45e081b2a2be61f24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cash receipts resulting from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, shall be classified as cash inflows from investing activities. Cash payments for premiums on corporate-owned life insurance policies, including bank-owned life insurance policies, may be classified as cash outflows for investing activities, operating activities, or a combination of cash outflows for investing and operating activities. ##### [230-10-45-21D](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21D) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:4cd6f2f130e50e29510caf9efebca3fbf73b055fed19bacb7102a812d0e45254 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a reporting entity applies the equity method, it shall make an accounting policy election to classify distributions received from equity method investees using either of the following approaches: 1. a Cumulative earnings approach: Distributions received are considered returns on investment and shall be classified as cash inflows from operating activities unless the investor's cumulative distributions received less distributions received in prior periods that were determined to be returns of investment exceed cumulative equity in earnings recognized by the investor (as adjusted for amortization of basis differences). When such an excess occurs, the current-period distribution up to this excess is considered a return of investment and shall be classified as cash inflows from investing activities. 2. b Nature of the distribution approach: Distributions received shall be classified on the basis of the nature of the activity or activities of the investee that generated the distribution as either a return on investment (classified as a cash inflow from operating activities) or a return of investment (classified as a cash inflow from investing activities) when such information is available. If an entity elects to apply the nature of the distribution approach and the information to apply that approach to distributions received from an individual equity method investee is not available to the investor, the entity shall report a change in accounting principle on a retrospective basis by applying the cumulative earnings approach described in (a) above for that investee. In such situations, an entity shall disclose that a change in accounting principle has occurred with respect to the affected investee(s) due to the lack of available information and shall provide the disclosures required in paragraphs [250-10-50-1(b)](https://asc.understandingaccounting.org/asc/250/10/#250-10-50-1) and [250-10-50-2](https://asc.understandingaccounting.org/asc/250/10/#250-10-50-2), as applicable. With either approach described in (a) or (b) above, an entity also shall comply with the applicable accounting policy disclosure requirements in paragraphs [235-10-50-1 through 50-6](https://asc.understandingaccounting.org/asc/235/10/#235-10-50-1) . ##### [230-10-45-22](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-22) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:e61eb5bf68327fc779b670cdc5b98316057032b9bcfcb2c7409b12c14dc05825 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain cash receipts and payments may have aspects of more than one class of cash flows. The classification of those cash receipts and payments shall be determined first by applying specific guidance in this Topic and other applicable Topics. In the absence of specific guidance, a reporting entity shall determine each separately identifiable source or each separately identifiable use within the cash receipts and cash payments on the basis of the nature of the underlying cash flows, including when judgment is necessary to estimate the amount of each separately identifiable source or use. A reporting entity shall then classify each separately identifiable source or use within the cash receipts and payments on the basis of their nature in financing, investing, or operating activities. ##### [230-10-45-22A](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-22A) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:c6b34eb7ef6f06a60ef802117c428f6aed1cdd9ebf58fc661feaa14002f84dab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use (for example, when a piece of equipment is acquired or produced by an entity to be rented to others for a period of time and then sold), the appropriate classification shall depend on the activity that is likely to be the predominant source or use of cash flows for the item. ##### [230-10-45-23](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-23) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:69e1488d370381a9f8cc1c5ff7ac5913d421dc64c358bcebd844a962309dbb24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Another example where cash receipts and payments include more than one class of cash flows involves a derivative instrument that includes a financing element at inception, other than a financing element inherently included in an at-the-market derivative instrument with no prepayments, because the borrower's cash flows are associated with both the financing element and the derivative instrument. For that derivative instrument, all cash inflows and outflows shall be considered cash flows from financing activities by the borrower. ##### [230-10-45-24](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-24) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:5536e15a38a9aba97d7a5fc5f0e84c2048a71c5fae934646dbb9d43ebac81de2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A statement of cash flows for a period shall report net cash provided or used by operating, investing, and financing activities and the net effect of those flows on the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents during the period. The statement of cash flows shall report that information in a manner that reconciles beginning and ending totals of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ##### [230-10-45-24A](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-24A) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:2557f4cc4706efdbbbce0bf0eb2214e561afe05057a3e3d07817d32285df22cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For cash flow disclosures related to a discontinued operation, see paragraph [205-20-50-5B(c)](https://asc.understandingaccounting.org/asc/205/20/#205-20-50-5B). ##### [230-10-45-25](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-25) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:ad69f73118bf6bd59dcdee016868780afdb44e90dc0ab0b56679796acdd37234 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In reporting cash flows from operating activities, entities are encouraged to report major classes of gross cash receipts and gross cash payments and their arithmetic sum—the net cash flow from operating activities (the direct method). (Paragraphs [230-10-55-1 through 55-4](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-1) and paragraph [230-10-55-21](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-21), respectively, discuss and illustrate a method by which those major classes of gross operating cash receipts and payments generally may be determined indirectly.) Entities that do so shall, at a minimum, separately report the following classes of operating cash receipts and payments: 1. a Cash collected from customers, including lessees, licensees, and the like 2. b Interest and dividends received. Interest and dividends that are donor restricted for long-term purposes as included in the list of [financing activities](https://asc.understandingaccounting.org/glossary/f/#financing-activities "Financing activities include obtaining resources from owners and providing them with a return on, and a return of, their investment; receiving restricted resources that by donor stipulation must be used for long-term purposes; borrowing money and repaying amounts borrowed, or otherwise settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.") and paragraph [230-10-45-14(c)](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-14) are not part of operating cash receipts. 3. c Other operating cash receipts, if any 4. d Cash paid to employees and other suppliers of goods or services, including suppliers of insurance, advertising, and the like 5. e Interest paid, including the portion of the payments made to settle zero-coupon debt instruments that is attributable to accreted interest related to the debt discount or the portion of the payments made to settle other debt instruments with coupon interest rates that are insignificant in relation to the [effective interest rate](https://asc.understandingaccounting.org/glossary/e/#effective-interest-rate "The rate of return implicit in the financial asset, that is, the contractual interest rate adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition of the financial asset. For purchased financial assets with credit deterioration, however, to decouple interest income from credit loss recognition, the premium or discount at acquisition excludes the discount embedded in the purchase price that is attributable to the acquirer's assessment of credit losses at the date of acquisition.") of the borrowing that is attributable to accreted interest related to the debt discount 6. f Income taxes paid 7. g Other operating cash payments, if any. Entities are encouraged to provide further breakdowns of operating cash receipts and payments that they consider meaningful and feasible. For example, a retailer or manufacturer might decide to further divide cash paid to employees and suppliers (category (d) in the preceding paragraph) into payments for costs of inventory and payments for selling, general, and administrative expenses. ##### [230-10-45-26](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-26) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:20993df9557577951f2ae6bf2af2569792a4a305372a3e26b803c59dec1a05b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Except for items described in paragraphs [230-10-45-8 through 45-9](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-8) , both investing cash inflows and outflows and financing cash inflows and outflows shall be reported separately in a statement of cash flows—for example, outlays for acquisitions of property, plant, and equipment shall be reported separately from proceeds from sales of property, plant, and equipment; proceeds of borrowings shall be reported separately from repayments of debt; and proceeds from issuing stock shall be reported separately from outlays to reacquire the entity's stock. ##### [230-10-45-27](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-27) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:3d740b9441e72c27e709027711abd2a8eca11f9bb5c68c2c7c692538d0fdfd5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Generally, each cash receipt or payment is to be classified according to its nature without regard to whether it stems from an item intended as a hedge of another item. For example, the proceeds of a borrowing are a financing cash inflow even though the debt is intended as a hedge of an investment, and the purchase or sale of a futures contract is an investing activity even though the contract is intended as a hedge of a firm commitment to purchase inventory. However, cash flows from a derivative instrument that is accounted for as a fair value hedge or cash flow hedge may be classified in the same category as the cash flows from the items being hedged provided that the derivative instrument does not include an other-than-insignificant financing element at inception, other than a financing element inherently included in an at-the-market derivative instrument with no prepayments (that is, the forward points in an at-the-money forward contract) and that the accounting policy is disclosed. If the derivative instrument includes an other-than-insignificant financing element at inception, all cash inflows and outflows of the derivative instrument shall be considered cash flows from financing activities by the borrower. If for any reason hedge accounting for an instrument that hedges an identifiable transaction or event is discontinued, then any cash flows after the date of discontinuance shall be classified consistent with the nature of the instrument. ##### [230-10-45-27A](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-27A) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:5a8c643a3fe25b8df538a1cdbef447a96c396bf36d0f642dfa3c956d47e02a69 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If crypto assets accounted for in accordance with Subtopic 350-60 are received as noncash consideration in the ordinary course of business (for example, in exchange for goods and services transferred to a customer) and converted nearly immediately into cash, the cash received shall be classified as operating activities. In this context, the term _nearly immediately_ refers to a short period of time that is expected to be within hours or a few days, rather than weeks. #### Reconciliation of Net Income and Net Cash Flow from Operating Activities ##### [230-10-45-28](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-28) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:0ba7717e07dab5cbab8dfe523b20e4e44d8fcf07a925486a2ae6268eb5fc35b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities that choose not to provide information about major classes of operating cash receipts and payments by the direct method as encouraged in paragraph [230-10-45-25](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-25) shall determine and report the same amount for net cash flow from operating activities indirectly by adjusting net income of a business entity or change in net assets of a not-for-profit entity (NFP) to reconcile it to net cash flow from operating activities (the indirect or reconciliation method). That requires adjusting net income of a business entity or change in net assets of an NFP to remove both of the following: 1. a The effects of all deferrals of past operating cash receipts and payments, such as changes during the period in inventory, deferred income, and the like, and all accruals of expected future operating cash receipts and payments, such as changes during the period in receivables and payables. Adjustments to net income of a business entity or change in net assets of an NFP to determine net cash flow from operating activities shall reflect accruals for interest earned but not received and interest incurred but not paid. Those accruals may be reflected in the statement of financial position in changes in assets and liabilities that relate to investing or financing activities, such as loans or deposits. However, interest credited directly to a deposit account that has the general characteristics of [cash](https://asc.understandingaccounting.org/glossary/c/#cash "Consistent with common usage, cash includes not only currency on hand but demand deposits with banks or other financial institutions. Cash also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. All charges and credits to those accounts are cash receipts or payments to both the entity owning the account and the bank holding it. For example, a bank's granting of a loan by crediting the proceeds to a customer's demand deposit account is a cash payment by the bank and a cash receipt of the customer when the entry is made.") is a cash outflow of the payor and a cash inflow of the payee when the entry is made. 2. b All items that are included in net income of a business entity or change in net assets of an NFP that do not affect net cash provided from, or used for, operating activities such as depreciation of property, plant, and equipment and amortization of finite-life intangible assets. This includes all items whose cash effects are related to investing or financing cash flows, such as gains or losses on sales of property, plant, and equipment and discontinued operations (which relate to investing activities), and gains or losses on extinguishment of debt (which relate to financing activities). ##### [230-10-45-29](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-29) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:c086dff6b1a7cf0d410e651432569c6c2fccedc396624d0644637785fd62c342 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The reconciliation of net income of a business entity to net cash flow from operating activities described in paragraph [230-10-45-28](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-28) shall be provided regardless of whether the direct or indirect method of reporting net cash flow from operating activities is used. However, NFPs that use the direct method of reporting net cash flows from operations are not required to provide a reconciliation of change in net assets to net cash flow from operating activities. Additional guidance for NFPs is found in Subtopic 958-230. The reconciliation shall separately report all major classes of reconciling items. For example, major classes of deferrals of past operating cash receipts and payments and accruals of expected future operating cash receipts and payments, including, at a minimum, changes during the period in receivables pertaining to operating activities, in inventory, and in payables pertaining to operating activities, shall be separately reported. Entities are encouraged to provide further breakdowns of those categories that they consider meaningful. For example, changes in receivables from customers for an entity's sale of goods or services might be reported separately from changes in other operating receivables. ##### [230-10-45-30](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-30) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:84bc306d98c94c28fca522d3c7536e8ab5d7452f3184b2692faefd85dadc1282 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity other than an NFP uses the direct method of reporting net cash flow from operating activities, the reconciliation of net income to net cash flow from operating activities shall be provided in a separate schedule. ##### [230-10-45-31](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-31) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:6f6479af82f1316df8e187acecb973ba38c5f228b1ed3630cb6444961e170f26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the indirect method is used, the reconciliation may be either reported within the statement of cash flows or provided in a separate schedule, with the statement of cash flows reporting only the net cash flow from operating activities. ##### [230-10-45-32](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-32) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:33.323Z to 2026-09-09T23:11:33.323Z Record version: sha256:6bebdb233ad669055ded501eb4f089c9baee2ab4f760f3824932b2893a76b306 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the reconciliation is presented in the statement of cash flows, all adjustments to net income of a business entity or change in net assets of an NFP to determine net cash flow from operating activities shall be clearly identified as reconciling items. Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:e49e7c48cbc79ecc024ef5ba2c3204d986008c2e07d053c05fc59d6ff4ebb371 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/230/10/#50-disclosure) SEC content: no #### Cash Equivalents Policy ##### [230-10-50-1](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:bedc913f4c7bc96dd559150592dfba4b38678c72c1d67c3649549a26374a675e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose its policy for determining which items are treated as [cash equivalents](https://asc.understandingaccounting.org/glossary/c/#cash-equivalents "Cash equivalents are short-term, highly liquid investments that have both of the following characteristics: Readily convertible to known amounts of cash So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month U.S. Treasury bill and a three-year U.S. Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Examples of items commonly considered to be cash equivalents are Treasury bills, commercial paper, money market funds, and federal funds sold (for an entity with banking operations)."). Any change to that policy is a change in accounting principle that shall be effected by restating financial statements for earlier years presented for comparative purposes. #### Interest and Income Taxes Paid ##### [230-10-50-2](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-2) Pending content: yes Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:f7b339b19623e59a46a9c0ebe75095463213e9cc6e760cba57a7d59349094337 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the indirect method is used, amounts of interest paid (net of amounts capitalized), including the portion of the payments made to settle zero-coupon debt instruments that is attributable to accreted interest related to the debt discount or the portion of the payments made to settle other debt instruments with coupon interest rates that are insignificant in relation to the [effective interest rate](https://asc.understandingaccounting.org/glossary/e/#effective-interest-rate "The rate of return implicit in the financial asset, that is, the contractual interest rate adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition of the financial asset. For purchased financial assets with credit deterioration, however, to decouple interest income from credit loss recognition, the premium or discount at acquisition excludes the discount embedded in the purchase price that is attributable to the acquirer's assessment of credit losses at the date of acquisition.") of the borrowing that is attributable to accreted interest related to the debt discount, and income taxes paid during the period shall be disclosed. Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [740-10-65-9](https://asc.understandingaccounting.org/asc/740/10/#740-10-65-9) If the indirect method is used, amounts of interest paid (net of amounts capitalized), including the portion of the payments made to settle zero-coupon debt instruments that is attributable to accreted interest related to the debt discount or the portion of the payments made to settle other debt instruments with coupon interest rates that are insignificant in relation to the [effective interest rate](https://asc.understandingaccounting.org/glossary/e/#effective-interest-rate "The rate of return implicit in the financial asset, that is, the contractual interest rate adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition of the financial asset. For purchased financial assets with credit deterioration, however, to decouple interest income from credit loss recognition, the premium or discount at acquisition excludes the discount embedded in the purchase price that is attributable to the acquirer's assessment of credit losses at the date of acquisition.") of the borrowing that is attributable to accreted interest related to the debt discount, shall be disclosed. ##### [230-10-50-2A](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-2A) Pending content: yes Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:b3776f415eace74c1a09bfe6f431ea4c0b2270fbb61ca9d37f45e47781e2d66b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [740-10-65-9](https://asc.understandingaccounting.org/asc/740/10/#740-10-65-9) Income taxes paid (net of refunds received) shall be disclosed in accordance with paragraphs [740-10-50-22 through 50-23](https://asc.understandingaccounting.org/asc/740/10/#740-10-50-22) . #### Noncash Investing and Financing Activities ##### [230-10-50-3](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:ca48965d05e98cacfe702585cb12772345fb78ff73e1e29d951f5a8de90ab332 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information about all [investing](https://asc.understandingaccounting.org/glossary/i/#investing-activities "Investing activities include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets, that is, assets held for or used in the production of goods or services by the entity (other than materials that are part of the entity's inventory). Investing activities exclude acquiring and disposing of certain loans or other debt or equity instruments that are acquired specifically for resale, as discussed in paragraphs 230-10-45-12 and 230-10-45-21.") and [financing activities](https://asc.understandingaccounting.org/glossary/f/#financing-activities "Financing activities include obtaining resources from owners and providing them with a return on, and a return of, their investment; receiving restricted resources that by donor stipulation must be used for long-term purposes; borrowing money and repaying amounts borrowed, or otherwise settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.") of an entity during a period that affect recognized assets or liabilities but that do not result in [cash](https://asc.understandingaccounting.org/glossary/c/#cash "Consistent with common usage, cash includes not only currency on hand but demand deposits with banks or other financial institutions. Cash also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. All charges and credits to those accounts are cash receipts or payments to both the entity owning the account and the bank holding it. For example, a bank's granting of a loan by crediting the proceeds to a customer's demand deposit account is a cash payment by the bank and a cash receipt of the customer when the entry is made.") receipts or cash payments in the period shall be disclosed. Those disclosures may be either narrative or summarized in a schedule, and they shall clearly relate the cash and noncash aspects of transactions involving similar items. ##### [230-10-50-4](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:bcc82c16793bf71f2f718fd790b07f514c53f17cb5d025bba243e4e89159ddc4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples of noncash investing and financing transactions are converting debt to equity; acquiring assets by assuming directly related liabilities, such as purchasing a building by incurring a mortgage to the seller; obtaining a [right-of-use asset](https://asc.understandingaccounting.org/glossary/r/#right-of-use-asset "An asset that represents a lessee's right to use an underlying asset for the lease term.") in exchange for a [lease liability](https://asc.understandingaccounting.org/glossary/l/#lease-liability "A lessee's obligation to make the lease payments arising from a lease, measured on a discounted basis."); obtaining a beneficial interest as consideration for transferring financial assets (excluding cash), including the transferor's trade receivables, in a securitization transaction; obtaining a building or investment asset by receiving a gift; and exchanging noncash assets or liabilities for other noncash assets or liabilities. ##### [230-10-50-5](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:1e9b16590e6362648bc3f6d9290deb6863c903c6294cacb2b21e75a3b38d74c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some transactions are part cash and part noncash; only the cash portion shall be reported in the statement of cash flows. ##### [230-10-50-6](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:b749012499c6ff4ff9e05b80216507e6cfcc4b95b4734e0d2010028d1a745a83 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If there are only a few such noncash transactions, it may be convenient to include them on the same page as the statement of cash flows. Otherwise, the transactions may be reported elsewhere in the financial statements, clearly referenced to the statement of cash flows. #### Restrictions on Cash and Cash Equivalents ##### [230-10-50-7](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:2d62b8b8fe0e4b2912b3c8ee9f3fa4b5bd0b43e412cfe46bcd618c2281dfe742 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose information about the nature of restrictions on its cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. An entity within the scope of Topic 958 on not-for-profit entities also shall provide the disclosures required in paragraph [958-210-50-3](https://asc.understandingaccounting.org/asc/210/958/#210-958-50-3) (see paragraphs [230-10-55-12A](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-12A) and [230-10-55-18A](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-18A)). ##### [230-10-50-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:61441390b66e229f784885d0195e3bdf444f20530bad4d3f90a5a2ceeecfd984 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents are presented in more than one line item within the statement of financial position, an entity shall, for each period that a statement of financial position is presented, present on the face of the statement of cash flows or disclose in the notes to the financial statements, the line items and amounts of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents reported within the statement of financial position. The amounts, disaggregated by the line item in which they appear within the statement of financial position, shall sum to the total amount of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents at the end of the corresponding period shown in the statement of cash flows. This disclosure may be provided in either a narrative or a tabular format (see paragraphs [230-10-55-12A](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-12A) and [230-10-55-18A](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-18A)). #### Accounting Policy for Derivative Instruments ##### [230-10-50-9](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-9) Pending content: yes Source downloaded (UTC): 2026-09-09T23:11:36.099Z to 2026-09-09T23:11:36.099Z Record version: sha256:87ba8cefc04f2d4772f62430c56066e1075268b9c262098d1c80e21256d3526b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Transition date:(P) June 30, 2027; (N) June 30, 2027Transition guidance: [105-10-65-7](https://asc.understandingaccounting.org/asc/105/10/#105-10-65-7) An entity shall disclose its accounting policy for where cash flows associated with derivative instruments and their related gains and losses are presented. Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:74ed1364e90babbc2cf0d9fac1a8d1dea54e49945e766f54945178e8e6ddbcd8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/230/10/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [230-10-55-1](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:6a551b38f3b85dd63a755df9720466d90b48044ed5b9254df339d24c74e3915c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Given sufficiently detailed information, major classes of operating [cash](https://asc.understandingaccounting.org/glossary/c/#cash "Consistent with common usage, cash includes not only currency on hand but demand deposits with banks or other financial institutions. Cash also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. All charges and credits to those accounts are cash receipts or payments to both the entity owning the account and the bank holding it. For example, a bank's granting of a loan by crediting the proceeds to a customer's demand deposit account is a cash payment by the bank and a cash receipt of the customer when the entry is made.") receipts and payments may be determined indirectly by adjusting revenue and expense amounts for the change during the period in related asset and liability accounts. For example, cash collected from customers may be determined indirectly by adjusting sales for the change during the period in receivables from customers for the entity's delivery of goods or services. Likewise, cash paid to suppliers and employees may be determined indirectly by adjusting cost of sales and expenses (exclusive of depreciation, interest, and income taxes) for the change during the period in inventories and payables for operating items. That procedure, of course, requires the availability of information concerning the change during the period in the appropriate classes of receivables and payables. The more detailed the categories of operating cash receipts and payments to be reported, the more complex the procedure for determining them. For the resulting operating cash receipts and payments to be accurate, the effects of all noncash entries to accounts receivable and payable, inventory, and other balance sheets accounts used in the calculation shall be eliminated. For example, the change in accounts receivable would have to be determined exclusive of any bad debt write-offs and other noncash charges and credits to customer accounts during the period. ##### [230-10-55-2](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:37dc7fbe9e81399241ac9fe7b525fc4e12fe6eac9baba7181482d95bfc0fd149 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Amounts of operating cash receipts and payments at the minimum level of detail specified in paragraph [230-10-45-25](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-25) often may be determined indirectly without incurring unduly burdensome costs over those involved in appropriately applying the indirect method. For example, determining net cash flow from [operating activities](https://asc.understandingaccounting.org/glossary/o/#operating-activities "Operating activities include all transactions and other events that are not defined as investing or financing activities (see paragraphs 230-10-45-12230-10-45-13230-10-45-14230-10-45-15). Operating activities generally involve producing and delivering goods and providing services. Cash flows from operating activities are generally the cash effects of transactions and other events that enter into the determination of net income.") by the indirect method requires the availability of the total amount of operating receivables. That is, any receivables for investing or financing items shall be segregated. Within the total amount of operating receivables, information on receivables from customers for an entity's delivery of goods or services may well be available separately from those for interest and dividends. Thus, it may be possible to determine indirectly cash collected from customers and interest and dividends received using much the same information needed to determine net cash flow from operating activities using the indirect method. ##### [230-10-55-3](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:92036935cee1788f4a6d151faea23bf6466243dcf9a3b24532c8023b333f747a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The same procedure may be used to determine cash paid to suppliers and employees. Determining net cash flow from operating activities by the direct method requires the availability of the total amount of payables pertaining to operating activities. Within that amount, payables to suppliers and employees may well be available separately from those for interest and taxes. However, determining operating cash payments in more detail than the minimum specified in paragraph [230-10-45-25](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-25) might involve significant incremental costs over those already required to apply the indirect method because information on subcategories of payables to suppliers and employees may not be available. ##### [230-10-55-4](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:4890b634504f22e1d01f07c86a83867f4720336281c7d589ff07e4e96c0844cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many entities may well be able to determine amounts of operating cash receipts and payments at the minimum level of detail that this Subtopic encourages (see paragraph [230-10-45-25](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-25)) indirectly at reasonable cost by the procedure discussed in paragraphs [230-10-55-1 through 55-3](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-1) . But few, if any, entities have experimented with the procedure, and the degree of difficulty encountered in applying it undoubtedly would vary depending on the nature of an entity's operations and the features of its current accounting system. #### Illustrations ##### [230-10-55-5](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:67bb0ac12cd57ac9b55148c6174e66ccf9c59d52d1e4643f1b8fd769a11019e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Examples below provide illustrations for the preparation of statements of cash flows of business entities. ##### [230-10-55-6](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-6) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:33f35c24aac92f49758b11306012939180d87e4d35b99da6edc21b904d120b0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Section 958-205-55 provides illustrations for the preparation of statements of cash flows for a not-for-profit entity (NFP). ##### [230-10-55-7](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-7) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:44660e0b94c400595a2ce463b55836fa9fbbebe798b67085466ce76075a247cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates a statement of cash flows under both the direct method and the indirect method for a domestic manufacturing entity. ##### [230-10-55-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-8) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:473259483784be1a0d6f8a7a415eca398260b46b0993757701ffafd74563bc30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The illustrations of the reconciliation of net income to net cash provided by operating activities may provide detailed information in excess of that required for a meaningful presentation. ##### [230-10-55-9](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-9) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:1cb76059d2ba3def80cd829e0c272e34e8ffb0ea46fc91162e2c39e6ac3fb93f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other formats or levels of detail may be appropriate for particular circumstances. ##### [230-10-55-10](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-10) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:d6e0da82ecd995f4715dd060ebdfdc00276ad0038b3e7e41c6c6cea6bcd69d07 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is a statement of cash flows for the year ended December 31, 19X1, for Entity A, a U.S. corporation engaged principally in manufacturing activities. This statement of cash flows illustrates the direct method of presenting cash flows from operating activities, as encouraged in paragraph [230-10-45-25](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-25). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-638931E4-C4B4-4B84-88DF-7770554AC579-low.gif) Entity A Consolidated Statement of Cash Flows "For the Year Ended December 31, 19X1" Cash flows from operating activities: Cash received from customers " $13,850 " Cash paid to suppliers and employees " (12,000)" Dividend received from affiliate 20 Interest received 55 Interest paid (net of amount capitalized) (220) Income taxes paid (325) Insurance proceeds received for business interruption 5 Cash paid to settle lawsuit for patent infringement (30) Net cash provided by operating activities "$1,355" Cash flows from investing activities: Proceeds from sale of facility 600 Payment received on note for sale of plant 150 Insurance proceeds received for damage to equipment 10 Capital expenditures " (1,000)" "Payment for purchase of Entity B, net of cash acquired" (925) Net cash used in investing activities "(1,165)" Cash flows from financing activities: Net borrowings under line-of-credit agreement 300 Principal payments under finance lease obligation (125) Proceeds from issuance of long-term debt 400 Proceeds from issuance of common stock 500 Dividends paid (200) Net cash provided by financing activities 875 "Net increase in cash, cash equivalents, and restricted cash" " 1,065 " "Cash, cash equivalents, and restricted cash at beginning of year" 600 "Cash, cash equivalents, and restricted cash at end of year" " $1,665 " Reconciliation of net income to net cash provided by operating activities: Net income $760 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization $445 Provision for losses on accounts receivable 200 Gain on sale of facility (80) Undistributed earnings of affiliate (25) Payment received on installment note receivable for sale of inventory 100 Gain on insurance proceeds received for damage to equipment (10) Change in assets and liabilities net of effects from purchase of Entity B: Increase in accounts receivable (215) Decrease in inventory 205 Increase in prepaid expenses (25) Decrease in accounts payable and accrued expenses (250) Increase in interest and income taxes payable 50 Increase in deferred taxes 150 Increase in other liabilities 50 Total adjustments 595 Net cash provided by operating activities "$1,355" ##### [230-10-55-11](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-11) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:d7bd8793f1aff6f6d5269a22317288cdf547e0a45d2b87fff11506fc080600db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The supplemental schedule of noncash [investing](https://asc.understandingaccounting.org/glossary/i/#investing-activities "Investing activities include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets, that is, assets held for or used in the production of goods or services by the entity (other than materials that are part of the entity's inventory). Investing activities exclude acquiring and disposing of certain loans or other debt or equity instruments that are acquired specifically for resale, as discussed in paragraphs 230-10-45-12 and 230-10-45-21.") and [financing activities](https://asc.understandingaccounting.org/glossary/f/#financing-activities "Financing activities include obtaining resources from owners and providing them with a return on, and a return of, their investment; receiving restricted resources that by donor stipulation must be used for long-term purposes; borrowing money and repaying amounts borrowed, or otherwise settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.") is as follows. - Entity A purchased all of the capital stock of Entity B for $950. In conjunction with the acquisition, liabilities were assumed as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-820292CE-7F15-49A5-A491-22001388443E-low.gif) Fair value of assets acquired " $1,580 " Cash paid for the capital stock (950) Liabilities assumed $630 - A finance lease obligation of $850 was incurred when Entity A entered into a lease for new equipment. - Additional common stock was issued upon the conversion of $500 of long-term debt. ##### [230-10-55-12](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-12) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:3b68ff6b93bcfe740a52b1f485217c9823a9217334ed821fecb9440134d655c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure of accounting policy is as follows. - For purposes of the statement of cash flows, the entity considers all highly liquid debt instruments purchased with a maturity of three months or less to be [cash equivalents](https://asc.understandingaccounting.org/glossary/c/#cash-equivalents "Cash equivalents are short-term, highly liquid investments that have both of the following characteristics: Readily convertible to known amounts of cash So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month U.S. Treasury bill and a three-year U.S. Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Examples of items commonly considered to be cash equivalents are Treasury bills, commercial paper, money market funds, and federal funds sold (for an entity with banking operations)."). ##### [230-10-55-12A](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-12A) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:36a825d38fcd2e51a96ce7ce8cb8398ec12f7d3e1cfeac581cf7280741dc4a74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Shown below is an illustrative disclosure of the nature of restrictions on cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents required by paragraph [230-10-50-7](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-7), as well as an illustrative disclosure of the line items and amounts of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents reported within the statement of financial position that sum to the total of the same such amounts at the end of the period shown in the statement of cash flows as required by paragraph [230-10-50-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-8) (in this illustrative example, assume Entity A has no restricted cash equivalents). Comparative statements of financial position are provided in the illustrative example in paragraph [230-10-55-19](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-19) only to facilitate understanding of the statement of cash flows. For purposes of applying paragraphs [230-10-50-7 through 50-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-7) to this illustrative example, assume that the year ended December 31, 19X1, is the only period for which a statement of financial position is presented. - The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-9F292DFC-41E4-41EF-8AFD-ADE34B1BD0BE-low.gif) 12/31/19X1 Cash and cash equivalents " $1,465 " Restricted cash 125 Restricted cash included in other long-term assets 75 "Total cash, cash equivalents, and restricted cash shown in the statement of cash flows" " $1,665 " - Amounts included in restricted cash represent those required to be set aside by a contractual agreement with an insurer for the payment of specific workers' compensation claims. Restricted cash included in other long-term assets on the statement of financial position represents amounts pledged as collateral for long-term financing arrangements as contractually required by a lender. The restriction will lapse when the related long-term debt is paid off. ##### [230-10-55-13](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-13) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:cce08420e00ddd13ef8465a9368c2f1f664374bfe2cf334e91417efb5e2ce897 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is Entity A's statement of cash flows for the year ended December 31, 19X1, prepared using the indirect method, as described in paragraph [230-10-45-28](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-28). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-1AC4885B-C7D2-4AC3-A887-F390C103549C-low.gif) Entity A Consolidated Statement of Cash Flows "For the Year Ended December 31, 19X1" Cash flows from operating activities: Net income $760 Depreciation and amortization $445 Provision for losses on accounts receivable 200 Gain on sale of facility (80) Undistributed earnings of affiliate (25) Payment received on installment note receivable for sale of inventory 100 Gain on insurance proceeds received for damage to equipment (10) Change in assets and liabilities net of effects from purchase of Entity B: Increase in accounts receivable (215) Decrease in inventory 205 Increase in prepaid expenses (25) Decrease in accounts payable and accrued expenses (250) Increase in interest and income taxes payable 50 Increase in deferred taxes 150 Increase in other liabilities 50 Total adjustments 595 Net cash provided by operating activities "1,355" Cash flows from investing activities: Proceeds from sale of facility 600 Payment received on note for sale of plant 150 Insurance proceeds received for damage to equipment 10 Capital expenditures " (1,000)" "Payment for purchase of Entity B, net of cash acquired" (925) Net cash used in investing activities "(1,165)" Cash flows from financing activities: Net borrowings under line-of-credit agreement 300 Principal payments under finance lease obligation (125) Proceeds from issuance of long-term debt 400 Proceeds from issuance of common stock 500 Dividends paid (200) Net cash provided by financing activities 875 "Net increase in cash, cash equivalents, and restricted cash" " 1,065 " "Cash, cash equivalents, and restricted cash at beginning of year" 600 "Cash, cash equivalents, and restricted cash at end of year" " $1,665 " ##### [230-10-55-14](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-14) Pending content: yes Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:db9af7f7527eb9b02742551ee7817df350bd00bc9b688c85baa7875212b1f322 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table illustrates the supplemental disclosures of cash flow information. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-7A4FFADE-4DC7-4921-B4DC-02E16426C192-low.gif) Cash paid during the year for: Interest (net of amount capitalized) $220 Income taxes 325 Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance: [740-10-65-9](https://asc.understandingaccounting.org/asc/740/10/#740-10-65-9) The following table illustrates the supplemental disclosures of cash flow information. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-7A4FFADE-4DC7-4921-B4DC-02E16426C192-low.gif) Cash paid during the year for: Interest (net of amount capitalized) $220 Income taxes 325 **Note:** This Example does not illustrate the disclosures of income taxes paid required by paragraphs [740-10-50-22 through 50-23](https://asc.understandingaccounting.org/asc/740/10/#740-10-50-22) , for the year ended December 31, 19X1. ##### [230-10-55-15](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-15) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:04e73e014c27005b97a07089cf3194c4a2bfb083c54fd81462dfc9c0dfaf2d49 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The supplemental schedule of noncash investing and financing activities is as follows. - Entity A purchased all of the capital stock of Entity B for $950. In conjunction with the acquisition, liabilities were assumed as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-EE7AD6BE-19BC-423F-83D6-76B1037807A7-low.gif) Fair value of assets acquired " $1,580 " Cash paid for the capital stock (950) Liabilities assumed $630 - A finance lease obligation of $850 was incurred when Entity A entered into a lease for new equipment. - Additional common stock was issued upon the conversion of $500 of long-term debt. ##### [230-10-55-16](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-16) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:e2f0cb78f7b05b562a70ea98359a40ca89706e1dec4a9931781819337cf453a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [230-10-55-17](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-17) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:85d5cf9e9a9810503671156b74ad1a028c348de3689f89903de2dc328aee60de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [230-10-55-18](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-18) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:bcf2b81df32e0f810550746b83a544a9f3dfd5e352ce778442fb63b4a89be82f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure of accounting policy is as follows. - For purposes of the statement of cash flows, the Entity considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. ##### [230-10-55-18A](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-18A) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:e422528d3fb2d1a2d7bc4fd3eba296c55f81a3015ae35a6dc580b9ce95d06daa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Shown below is an illustrative disclosure of the nature of restrictions on cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents required by paragraph [230-10-50-7](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-7), as well as an illustrative disclosure of the line items and amounts of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents reported within the statement of financial position that sum to the total of the same such amounts at the end of the period shown in the statement of cash flows as required by paragraph [230-10-50-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-8) (in this illustrative example, assume Entity A has no restricted cash equivalents). Comparative statements of financial position are provided in the illustrative example in paragraph [230-10-55-19](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-19) only to facilitate understanding of the statement of cash flows. For purposes of applying paragraphs [230-10-50-7 through 50-8](https://asc.understandingaccounting.org/asc/230/10/#230-10-50-7) to this illustrative example, assume that the year ended December 31, 19X1, is the only period for which a statement of financial position is presented. - The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-4F2AF9E5-975C-4E03-95F7-195ED087892B-low.gif) 12/31/19X1 Cash and cash equivalents " $1,465 " Restricted cash 125 Restricted cash included in other long-term assets 75 "Total cash, cash equivalents, and restricted cash shown in the statement of cash flows" " $1,665 " - Amounts included in restricted cash represent those required to be set aside by a contractual agreement with an insurer for the payment of specific workers' compensation claims. Restricted cash included in other long-term assets on the statement of financial position represents amounts pledged as collateral for long-term financing arrangements as contractually required by a lender. The restriction will lapse when the related long-term debt is paid off. ##### [230-10-55-19](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-19) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:514bb1f26e5395fc5fa3713fd09a15f13f38e02739a5fa387e4eb89367eb5373 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following summarizes financial information for the current year for Entity A, which provides the basis for the statements of cash flows presented in paragraphs [230-10-55-10 through 55-18A](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-10). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-757F8D00-64A3-4889-9AC7-E2B9FDB8A02C-low.gif) Entity A Consolidated Statement of Financial Position 1/1/X1 12/31/X1 Change Assets: Cash and cash equivalents $ 300 "$ 1,465" "$ 1,165" Restricted cash 225 125 (100) Accounts receivable (net of allowance for losses of $600 and $450) "1,770" "1,940" 170 Notes receivable 400 150 (250) Inventory "1,230" "1,375" 145 Prepaid expenses 110 135 25 Total current assets "4,035" "5,190" "1,155" Investments 250 275 25 "Property, plant, and equipment, at cost" "6,460" "8,460" "2,000" Accumulated depreciation "(2,100)" "(2,300)" (200) "Property, plant, and equipment, net" "4,360" "6,160" "1,800" Intangible assets 40 175 135 Other long-term assets 430 430 - Total noncurrent assets 5080 "7,040" "1,960" Total assets "$ 9,115" "$ 12,230" "$ 3,115" Liabilities: Accounts payable and accrued expenses "$ 1,085" "$ 1,090" $ 5 Interest payable 30 45 15 Income taxes payable 50 85 35 Short-term debt 450 750 300 Current portion of finance lease obligation - 125 125 Total current liabilities "1,615" "2,095" 480 Finance lease obligation - 600 600 Long-term debt "2,150" "2,425" 275 Deferred taxes 375 525 150 Other liabilities 225 275 50 Total noncurrent liabilities "2,750" "3,825" "1,075" Total liabilities "4,365" "5,920" "1,555" Stockholders' equity: Capital stock "2,000" "3,000" "1,000" Retained earnings "2,750" "3,310" 560 Total stockholders' equity "4,750" "6,310" "1,560" Total liabilities and stockholders' equity "$ 9,115" "$ 12,230" "$ 3,115" Entity A Consolidated Statement of Income "For the Year Ended December 31, 19X1" Sales " $13,965 " Cost of sales " (10,290)" Depreciation and amortization (445) "Selling, general, and administrative expenses" " (1,890)" Interest expense (235) Equity in earnings of affiliate 45 Gain on sale of facility 80 Interest income 55 Insurance proceeds 15 Loss from patent infringement lawsuit (30) Income before income taxes " 1,270 " Provision for income taxes (510) Net income $760 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-84229CBD-5EE7-42E4-A460-9680EBC6B63D-low.gif) Entity A Consolidated Statement of Income "For the Year Ended December 31, 19X1" Sales " $13,965 " Cost of sales " (10,290)" Depreciation and amortization (445) "Selling, general, and administrative expenses" " (1,890)" Interest expense (235) Equity in earnings of affiliate 45 Gain on sale of facility 80 Interest income 55 Insurance proceeds 15 Loss from patent infringement lawsuit (30) Income before income taxes " 1,270 " Provision for income taxes (510) Net income $760 ##### [230-10-55-20](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-20) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:07421f0f6014f3b02992cdc5984c96efcdb20a5235ab8f52262b69cafb192a78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following transactions were entered into by Entity A during 19X1 and are reflected in the preceding financial statements: 1. a Entity A wrote off $350 of accounts receivable when a customer filed for bankruptcy. A provision for losses on accounts receivable of $200 was included in Entity A's selling, general, and administrative expenses. 2. b Entity A collected the third and final annual installment payment of $100 on a note receivable for the sale of inventory and collected the third of four annual installment payments of $150 each on a note receivable for the sale of a plant. Interest on these notes through December 31 totaling $55 was also collected. 3. c Entity A received a distribution of $20 from an affiliate accounted for under the equity method of accounting. Entity A made an accounting policy election to apply the cumulative earnings approach described in paragraph [230-10-45-21D(a)](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-21D) and determined that the distribution was a return on investment. 4. d Entity A sold a facility with a book value of $520 and an original cost of $750 for $600 cash. 5. e Entity A constructed a new facility for its own use and placed it in service. Accumulated expenditures during the year of $1,000 included capitalized interest of $10. 6. f Entity A entered into a capital lease for new equipment with a fair value of $850. The entity classified the lease as a finance lease. Principal payments under the lease obligation totaled $125. 7. g Entity A purchased all of the capital stock of Entity B for $950 in a business combination. The fair values of Entity B's assets and liabilities at the date of acquisition are presented below. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-1328EA69-B497-4EBF-9041-75027FE9CDE6-low.gif) Cash $25 Accounts receivable 155 Inventory 350 "Property, plant, and equipment" 900 Patents 80 Goodwill 70 Accounts payable and accrued expenses (255) Long-term note payable (375) Net assets acquired $950 8. h Entity A borrowed and repaid various amounts under a line-of-credit agreement in which borrowings are payable 30 days after demand. The net increase during the year in the amount borrowed against the line-of-credit totaled $300. 9. i Entity A issued $400 of long-term debt securities. 10. j Entity A's provision for income taxes included a deferred provision of $150. 11. k Entity A's depreciation of property, plant, and equipment and amortization of right-of-use assets arising from a finance lease totaled $430, and amortization of intangible assets totaled $15. 12. l Entity A's selling, general, and administrative expenses included an accrual for incentive compensation of $50 that has been deferred by executives until their retirement. The related obligation was included in other liabilities. 13. m Entity A collected insurance proceeds of $15 ($5 from a business interruption claim that resulted when a storm precluded shipment of inventory for one week and $10 from a property claim that resulted when fully depreciated manufacturing equipment was damaged by a fire). 14. n Entity A paid $30 to settle a lawsuit for patent infringement. 15. o Entity A issued $1,000 of additional common stock of which $500 was issued for cash and $500 was issued upon conversion of long-term debt. 16. p Entity A paid dividends of $200. 17. q Entity A paid $100 from its restricted cash for workers' compensation claims accrued before January 1, 19X1. Before January 1, 19X1, Entity A's insurer required $225 to be set aside by a contractual arrangement for the payment of specific workers' compensation claims. ##### [230-10-55-21](https://asc.understandingaccounting.org/asc/230/10/#230-10-55-21) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:40.068Z to 2026-09-09T23:11:40.068Z Record version: sha256:8e0e91eeed65d87af22866d9765ceed07a8095670aa7a3155c71f3ba274d6b93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Based on the financial data from the preceding paragraphs, which illustrated the statement of cash flows prepared using the direct method, the following computations illustrate a method of indirectly determining cash received from customers and cash paid to suppliers and employees for use in a statement of cash flows under the direct method. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-50BFA529-672E-4BA0-B341-AFF4BFFAD8E2-low.gif) Cash received from customers during the year: Customer sales " $13,965 " Collection of installment payment for sale of inventory 100 Gross accounts receivable at beginning of year " $2,370 " Accounts receivable acquired in purchase of Entity B 155 Accounts receivable written off (350) Gross accounts receivable at end of year " (2,390)" Excess of new accounts receivable over collections from customers (215) Cash received from customers during the year " $13,850 " Cash paid to suppliers and employees during the year: Cost of sales " $10,290 " General and administrative expenses " $1,890 " Expenses not requiring cash outlay (provision for uncollectible accounts receivable) (200) Net expenses requiring cash payments " 1,690 " Inventory at beginning of year " (1,230)" Inventory acquired in purchase of Entity B (350) Inventory at end of year " 1,375 " Net decrease in inventory from Entity A's operations (205) Adjustments for changes in related accruals: Account balances at beginning of year Accounts payable and accrued expenses " $1,085 " Other liabilities 225 Prepaid expenses (110) Total " 1,200 " Accounts payable and accrued expenses acquired in purchase of Entity B 255 Account balances at end of year Accounts payable and accrued expenses " 1,090 " Other liabilities 275 Prepaid expenses (135) Total " (1,230)" Additional cash payments not included in expense 225 Cash paid to suppliers and employees during the year " $12,000 " Source downloaded (UTC): 2026-09-09T23:11:44.196Z to 2026-09-09T23:11:44.196Z Record version: sha256:c40789ce5ce5c9634a52337c2dbe0d85a63248379ec563d8c82c440d364852a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/230/10/#60-relationships) SEC content: no ##### [230-10-60-1](https://asc.understandingaccounting.org/asc/230/10/#230-10-60-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:44.196Z to 2026-09-09T23:11:44.196Z Record version: sha256:089512852cf9c4051d84d25a35d0b8240689d1021755d5a4963236aab2da026a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Other Presentation Matters Sections of individual Subtopics address various presentation matters related to the Subtopic, including the statement of [cash](https://asc.understandingaccounting.org/glossary/c/#cash "Consistent with common usage, cash includes not only currency on hand but demand deposits with banks or other financial institutions. Cash also includes other kinds of accounts that have the general characteristics of demand deposits in that the customer may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. All charges and credits to those accounts are cash receipts or payments to both the entity owning the account and the bank holding it. For example, a bank's granting of a loan by crediting the proceeds to a customer's demand deposit account is a cash payment by the bank and a cash receipt of the customer when the entry is made.") flows and other financial statement matters. The following may not be an all-inclusive list; there are numerous sources that address the statement of cash flows in the relevant Subtopics. #### Investments—Debt Securities ##### [230-10-60-2](https://asc.understandingaccounting.org/asc/230/10/#230-10-60-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:44.196Z to 2026-09-09T23:11:44.196Z Record version: sha256:86785a9a3850dcb8b84bf2fde9d3f0519a0fd9020adc5b9679f8182bc02b12cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on classification and reporting in the statement of cash flows of cash flows from available-for-sale, held-to-maturity, and trading debt securities, see Topic 320. #### Investments—Equity Securities ##### [230-10-60-2A](https://asc.understandingaccounting.org/asc/230/10/#230-10-60-2A) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:44.196Z to 2026-09-09T23:11:44.196Z Record version: sha256:f0a4e7a80adbbb69c812e92895bc5a766ffac9a91bfdeb6cc25fc097dbff6968 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on classification and reporting in the statement of cash flows of cash flows from equity securities, see Topic 321 on investments—equity securities. #### Investments—Other ##### [230-10-60-3](https://asc.understandingaccounting.org/asc/230/10/#230-10-60-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:44.196Z to 2026-09-09T23:11:44.196Z Record version: sha256:a22c8b123956c111032539d11e984d6b55a99767763fd9ef260a4d6208b0f0eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on classification in the statement of cash flows of cash receipts and cash payments related to life settlement contracts, see Section 325-30-45. #### Foreign Currency Matters ##### [230-10-60-4](https://asc.understandingaccounting.org/asc/230/10/#230-10-60-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:44.196Z to 2026-09-09T23:11:44.196Z Record version: sha256:0c2bc786fe515cb77d6c624da69a49f0eb9a47f08f4c3d07c51753ad4986a4f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For reporting and implementation guidance for presenting a statement of cash flows of an entity with foreign currency transactions or foreign currency operations, see Topic 830. ##### [230-10-60-5](https://asc.understandingaccounting.org/asc/230/10/#230-10-60-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:44.196Z to 2026-09-09T23:11:44.196Z Record version: sha256:fefdc0969e81e86ba7cea7f95ae4bd3903274f942d30f54569b49739e92b6538 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-10](https://asc.understandingaccounting.org/updates/asu-2014-10/). Source downloaded (UTC): 2026-09-09T23:11:46.877Z to 2026-09-09T23:11:46.877Z Record version: sha256:9416925b673bbd89655e37b07291d69f9d486cf07b4b265c50778ef62d3f2d0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-10-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/230/10/#65-transition-and-open-effective-date-information) SEC content: no ##### [230-10-65-1](https://asc.understandingaccounting.org/asc/230/10/#230-10-65-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:46.877Z to 2026-09-09T23:11:46.877Z Record version: sha256:18e3a2c4856d61a3868a418243e8a3622fe05cfc05709b7cfa864b533d902547 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 12/17/2014 after the end of the transition period stated in Accounting Standards Update No. 2012-05, _Statement of Cash Flows (Topic 230): Not-for-Profit Entities: Classification of the Sale Proceeds of Donated Financial Assets in the Statement of Cash Flows._ ##### [230-10-65-2](https://asc.understandingaccounting.org/asc/230/10/#230-10-65-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:46.877Z to 2026-09-09T23:11:46.877Z Record version: sha256:5c6b9a73cc7dbb283109c3c7ccdaf80da41812f5007839762c5c190bed600319 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 08/12/2020 after the end of the transition period stated in Accounting Standards Update No. 2016-15, _Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments_. ##### [230-10-65-3](https://asc.understandingaccounting.org/asc/230/10/#230-10-65-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:11:46.877Z to 2026-09-09T23:11:46.877Z Record version: sha256:57eba70d26bdca8849fa392bb373354422036108fb1d53f540f5359c4fd5e776 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/20/2020 after the end of the transition period stated in Accounting Standards Update No. 2016-18, _Statement of Cash Flows (Topic 230): Restricted Cash_.