{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/230/830/#55-implementation-guidance-and-illustrations","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"230","topic_title":"Statement of Cash Flows","subtopic":"230-830","subtopic_title":"Foreign Currency Matters","section":{"number":"55","label":"55 Implementation Guidance and Illustrations","anchor":"55-implementation-guidance-and-illustrations","is_sec":false,"groups":[{"block":null,"heading":"Illustrations","paragraphs":[{"citation":"230-830-55-1","para":"55-1","html":"
This Example illustrates a statement of cash flows under the direct method for a manufacturing entity with foreign operations. 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. Other formats or levels of detail may be appropriate for particular circumstances.
","snippet":"This Example illustrates a statement of cash flows under the direct method for a manufacturing entity with foreign operations. The illustrations of the reconciliation of net income to net cash provided by operating activ…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:219ba2e28c18a81f0edd49537331f736ac91fa03aa3928fd71384dde84c74f99","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-2","para":"55-2","html":"
The following is a consolidating statement of cash flows for the year ended December 31, 19X1, for Entity F, a multinational U.S. corporation engaged principally in manufacturing activities, which has two wholly owned foreign subsidiaries— Subsidiary A and Subsidiary B. For Subsidiary A, the local currency is the functional currency. For Subsidiary B, which operates in a highly inflationary economy, the U.S. dollar is the functional currency.
","snippet":"The following is a consolidating statement of cash flows for the year ended December 31, 19X1, for Entity F, a multinational U.S. corporation engaged principally in manufacturing activities, which has two wholly owned fo…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e692d43e59355a55ca303dc0122796b131851ff4de46234dfb621a4163e27419","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-3","para":"55-3","html":"
The entity would make the following disclosure.
","snippet":"The entity would make the following disclosure.\nCash in excess of daily requirements is invested in marketable securities consisting of U.S. Treasury bills with maturities of three months or less. Such investments are de…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:77e6a68ddf26b88852d059b8bd2f0db4bd309ba0ac6c8cad485d6b613abcee83","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-4","para":"55-4","html":"
Summarized in the following tables is financial information for the current year for Entity F, which provides the basis for the statement of cash flows presented in paragraph 830-230-55-2.
","snippet":"Summarized in the following tables is financial information for the current year for Entity F, which provides the basis for the statement of cash flows presented in paragraph 830-230-55-2.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:279d75f5f516fe9b44824f27ba546248fffb83ecf52aa68ca6026fd4bf21a331","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-5","para":"55-5","html":"
The U.S. dollar equivalents of one unit of local currency applicable to Subsidiary A and to Subsidiary B are as follows.
","snippet":"The U.S. dollar equivalents of one unit of local currency applicable to Subsidiary A and to Subsidiary B are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c9a0bd9046f0d7c21fd17ef435a558e5068be60e81141d2cfd370d47cd861f63","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-6","para":"55-6","html":"
The computation of the weighted-average exchange rate for Subsidiary A excludes the effect of Subsidiary A's sale of inventory to the parent entity at the beginning of the year discussed in paragraph 830-230-55-10(a).
","snippet":"The computation of the weighted-average exchange rate for Subsidiary A excludes the effect of Subsidiary A's sale of inventory to the parent entity at the beginning of the year discussed in paragraph 830-230-55-10(a).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3a665da5d5556f20b58ee5c8425cf44d2128b82bf7dc6e9611abd1135c775d87","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-7","para":"55-7","html":"
Comparative statements of financial position for the parent entity and for each of the foreign subsidiaries are as follows.
","snippet":"Comparative statements of financial position for the parent entity and for each of the foreign subsidiaries are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:699cd6a9195743ee1023b4a8513390ff6ef62b030b32c15e3073f2cc9a9ecf01","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-8","para":"55-8","html":"
Statements of income in local currency and U.S. dollars for each of the foreign subsidiaries are as follows.
","snippet":"Statements of income in local currency and U.S. dollars for each of the foreign subsidiaries are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4f0961ad3f5700fee391657825d73cbaced44d8373cf20148fa822e218b4bfc5","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-9","para":"55-9","html":"
All of the following transactions were entered into during the year by the parent entity and are reflected in the preceding financial statements:
  1. a
    The parent entity invested cash in excess of daily requirements in U.S. Treasury bills. Interest earned on such investments totaled USD 35.
  2. b
    The parent entity sold excess property with a net book value of USD 35 for USD 150.
  3. c
    The parent entity's capital expenditures totaled USD 450.
  4. d
    The parent entity wrote down to its estimated net realizable value of USD 25 a facility with a net book value of USD 75.
  5. e
    The parent entity's short-term debt consisted of commercial paper with maturities not exceeding 60 days.
  6. f
    The parent entity repaid long-term notes of USD 200.
  7. g
    The parent entity's depreciation totaled USD 340, and amortization of intangible assets totaled USD 10.
  8. h
    The parent entity's provision for income taxes included deferred taxes of USD 90.
  9. i
    Because of a change in product design, the parent entity purchased all of Subsidiary A's beginning inventory for its book value of USD 160. All of the inventory was subsequently sold by the parent entity.
  10. j
    The parent entity received a dividend of USD 22 from Subsidiary A. The dividend was credited to the parent entity's income.
  11. k
    The parent entity purchased from Subsidiary B USD 270 of merchandise of which USD 45 remained in the parent entity's inventory at year-end. Intra-entity profit on the remaining inventory totaled USD 15.
  12. l
    The parent entity loaned USD 15, payable in U.S. dollars, to Subsidiary B.
  13. m
    Entity F paid dividends totaling USD 120 to shareholders.
","snippet":"All of the following transactions were entered into during the year by the parent entity and are reflected in the preceding financial statements:\n(a) The parent entity invested cash in excess of daily requirements in U.S…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:59020b5acf8e3609cb25757ab0e6d6628d6e660bcf78265028ad22d3db5998f7","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-10","para":"55-10","html":"
All of the following transactions were entered into during the year by Subsidiary A and are reflected in the above financial statements. The U.S. dollar equivalent of the local currency amount based on the exchange rate at the date of each transaction is included. Except for the sale of inventory to the parent entity (the transaction in [a]), Subsidiary A's sales and purchases and operating cash receipts and payments occurred evenly throughout the year.
  1. a
    Because of a change in product design, Subsidiary A sold all of its beginning inventory to the parent entity for its book value of LC 400 (USD 160).
  2. b
    Subsidiary A sold equipment for its book value of LC 275 (USD 116) and purchased new equipment at a cost of LC 600 (USD 258).
  3. c
    Subsidiary A issued an additional LC 175 (USD 75) of 30-day notes and renewed the notes at each maturity date.
  4. d
    Subsidiary A issued long-term debt of LC 400 (USD 165) and repaid long-term debt of LC 250 (USD 105).
  5. e
    Subsidiary A paid a dividend to the parent entity of LC 50 (USD 22).
","snippet":"All of the following transactions were entered into during the year by Subsidiary A and are reflected in the above financial statements. The U.S. dollar equivalent of the local currency amount based on the exchange rate …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:82d78fb555de9b92141b4a9cabc394c773cd0ddc102e7c06fe7e12573790f7b5","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-11","para":"55-11","html":"
The following transactions were entered into during the year by Subsidiary B and are reflected in the preceding financial statements. The U.S. dollar equivalent of the local currency amount based on the exchange rate at the date of each transaction is included. Subsidiary B's sales and operating cash receipts and payments occurred evenly throughout the year. For convenience, all purchases of inventory were based on the weighted-average exchange rate for the year. Subsidiary B uses the first-in, first-out (FIFO) method of inventory valuation.
  1. a
    Subsidiary B had sales to the parent entity as follows.
    • \"
      Local Currency U.S. Dollars Intra-entity sales \" LC 9,000 \" USD 270 Cost of sales \" (4,500)\" (180) Gross profit\t\" LC 4,500 \" USD 90
  2. b
    Subsidiary B sold equipment with a net book value of LC 200 (USD 39) for LC 350 (USD 14). New equipment was purchased at a cost of LC 500 (USD 15).
  3. c
    Subsidiary B borrowed USD 15 (LC 500), payable in U.S. dollars, from the parent entity.
  4. d
    Subsidiary B repaid LC 1,000 (USD 35) of long-term debt.
","snippet":"The following transactions were entered into during the year by Subsidiary B and are reflected in the preceding financial statements. The U.S. dollar equivalent of the local currency amount based on the exchange rate at …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cbeaf4d6c9bf2aad251a2bfe80fe83dfed6fd5831a4a6a5015f50cf3fe539a91","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-12","para":"55-12","html":"
Statements of cash flows in the local currency and in U.S. dollars for Subsidiary A and Subsidiary B are as follows.
","snippet":"Statements of cash flows in the local currency and in U.S. dollars for Subsidiary A and Subsidiary B are as follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3fa7311a27970f78dd04c1006b43fc6377990ed904fa97d5501080366637a725","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-13","para":"55-13","html":"
A reconciliation of net income to net cash provided by operating activities follows.
","snippet":"A reconciliation of net income to net cash provided by operating activities follows.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0467bf1bef7d7b083416b3cd4533ed7f6f1aaa68042f772c5adb9957248427b","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-14","para":"55-14","html":"
The following is the computation of cash received from customers and cash paid to suppliers and employees as reported in the consolidating statement of cash flows for Entity F appearing in paragraph 830-230-55-2.
","snippet":"The following is the computation of cash received from customers and cash paid to suppliers and employees as reported in the consolidating statement of cash flows for Entity F appearing in paragraph 830-230-55-2.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9dc14b3887700f37d40d58272fb6ccdd33a1ffd94b380e60ef43f6498a231009","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},{"citation":"230-830-55-15","para":"55-15","html":"
The following is the computation of the effect of exchange rate changes on cash for Subsidiary A and Subsidiary B.
","snippet":"The following is the computation of the effect of exchange rate changes on cash for Subsidiary A and Subsidiary B.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0b592a448f0075d3417ae429e16ad72309b0737f5bb0206c4508bb43e6635121","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:493f7714b8d61dc04904622f135ae2c64901d324a7838685f099c5174cb99446","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bcf7a8ecda62a2cfac9493fedb65fc03728cb10ce69af6e802599cd907edef43","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bcf7a8ecda62a2cfac9493fedb65fc03728cb10ce69af6e802599cd907edef43","downloaded_from":"2026-09-09T23:12:06.060Z","last_downloaded_at":"2026-09-09T23:12:06.060Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477300","source_sha256":"f955a4294efe93cde785df38895eac93bc81b93f4c6f2c493e5ee72e8d60b156"}}