# ASC 230-942: Statement of Cash Flows — Financial Services—Depository and Lending Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/230/942/) 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): 2026-09-09T23:12:57.318Z to 2026-09-09T23:13:16.461Z Record version: sha256:cf57a906ddfb76a1fe4668f902fa3c97b44e4382045b36a10bf2d1e22c769745 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-942: Statement of Cash Flows — Financial Services—Depository and Lending ### Machine-generated study aids ```json { "summary": "This Subtopic tailors the statement of cash flows to banks, savings institutions, and credit unions. Its core rule is a net-reporting exception: these institutions need not report gross cash receipts and payments for deposits placed with or withdrawn from other financial institutions, time deposits accepted and repaid, and loans made to customers and principal collections on those loans (230-942-45-1). It also requires that principal payments received under sales-type and direct financing leases be classified as investing activities (230-942-45-4) and provides a full direct-method illustration in Section 55.", "key_points": [ "Banks, savings institutions, and credit unions may report net (rather than gross) cash receipts and payments for deposits placed with and withdrawn from other financial institutions, time deposits accepted and repaid, and customer loans made and principal collected (230-942-45-1).", "When such an institution is part of a consolidated entity, the net amounts for its deposit or lending activities must be presented separately from gross amounts for other investing and financing activities of the consolidated group, including those of a non-bank subsidiary of the institution (230-942-45-2).", "Principal payments received under sales-type leases and direct financing leases are classified as investing activities (230-942-45-4).", "General cash flow presentation guidance in Section 230-10-45 continues to apply (230-942-45-3), and the scope follows 942-10-15 (230-942-15-1).", "Section 55 illustrates a direct-method statement of cash flows for a financial institution, applying 230-10-45-25 through 45-26 and 45-28 through 45-32; the level of detail shown exceeds what is required and other formats may be appropriate (230-942-55-1).", "The example shows that net reporting is elective—Financial Institution, Inc. chose to report gross receipts and payments for certificates of deposit of all maturities (230-942-55-5(f)).", "Interest paid includes amounts credited directly to demand deposit, NOW, and savings accounts, consistent with the definition of cash (230-942-55-5(m))." ], "categories": [ "Cash flows", "Presentation", "Industry-specific", "Financial statement presentation" ], "audience_level": "intermediate", "student_note": "Exam questions often test the exception itself: unlike most entities, depository institutions may net loan and deposit flows because turnover is quick and amounts are large. The common misunderstanding is thinking netting is mandatory or that it can be blended with the gross amounts of other consolidated entities—it is permissive, and in consolidation the net amounts must be shown separately.", "related_topics": [ "230-10", "942-10", "942-230", "842", "310" ], "key_concepts": [ "net reporting of cash flows", "direct method", "deposits and withdrawals", "loan originations and principal collections", "consolidated presentation", "direct financing lease principal payments", "certificates of deposit", "interest paid" ] } ``` Source downloaded (UTC): 2026-09-09T23:12:57.318Z to 2026-09-09T23:12:57.318Z Record version: sha256:49b74470af7c5fd85e20519f1522e6502d25b55d82303c4b7b365d846ca0ed82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-942-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/230/942/#00-status) SEC content: no ##### [230-942-00-1](https://asc.understandingaccounting.org/asc/230/942/#230-942-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:12:57.318Z to 2026-09-09T23:12:57.318Z Record version: sha256:e8a396e0ad5afc3c2837bdfe00fc6af1f302db82afadbaefa2f4c517ec334ef1 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
942-230-45-4AddedAccounting Standards Update No. 2019-0103/05/2019
942-230-55-2AmendedMaintenance Update 2017-06 (PDF)04/07/2017
942-230-55-2AmendedAccounting Standards Update No. 2016-1306/16/2016
942-230-55-3SupersededMaintenance Update 2017-06 (PDF)04/07/2017
942-230-55-4AmendedAccounting Standards Update No. 2016-1306/16/2016
Source downloaded (UTC): 2026-09-09T23:12:59.455Z to 2026-09-09T23:12:59.455Z Record version: sha256:5e7f6305e2a33f87e2988bfe4d7279ee902d7a936f1e22c8dab153ed9cb54988 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-942-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/230/942/#05-overview-and-background) SEC content: no ##### [230-942-05-1](https://asc.understandingaccounting.org/asc/230/942/#230-942-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:12:59.455Z to 2026-09-09T23:12:59.455Z Record version: sha256:c380323028050d85cd82752ab38aa99ac487a54ae2d1229919c66c4a1e6f73ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses the reporting of cash receipts and payments by financial institutions in the cash flow statement. It provides an illustration of the statement of cash flows under the direct method for a financial institution. Source downloaded (UTC): 2026-09-09T23:13:02.885Z to 2026-09-09T23:13:02.885Z Record version: sha256:e30be56c1e733a29d7343b7abab5b107971f9ad0ae3b3acfc2ada5133dcddf4a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-942-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/230/942/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [230-942-15-1](https://asc.understandingaccounting.org/asc/230/942/#230-942-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:02.885Z to 2026-09-09T23:13:02.885Z Record version: sha256:76eae14ea5bef19faccec8544067d53f186df0e1d7919f7aa826747571ece18d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 942-10-15. Source downloaded (UTC): 2026-09-09T23:13:09.821Z to 2026-09-09T23:13:09.821Z Record version: sha256:6631ae9a69b3764cd6ff957a99a04504ea5359657a01ba9f8ab93d54d4386f88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-942-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/230/942/#45-other-presentation-matters) SEC content: no ##### [230-942-45-1](https://asc.understandingaccounting.org/asc/230/942/#230-942-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:09.821Z to 2026-09-09T23:13:09.821Z Record version: sha256:835a0e897e079e392d47097e391392ded46425fa961b79686680afd4e4efd517 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Banks, savings institutions, and credit unions are not required to report gross amounts of cash receipts and cash payments for any of the following: 1. a Deposits placed with other financial institutions and withdrawals of deposits 2. b Time deposits accepted and repayments of deposits 3. c Loans made to customers and principal collections of loans. ##### [230-942-45-2](https://asc.understandingaccounting.org/asc/230/942/#230-942-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:09.821Z to 2026-09-09T23:13:09.821Z Record version: sha256:a49010e3717e23537a8375cabf8a9ccb1dc21cd3f5992a389560220e7257e969 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When those entities constitute part of a consolidated entity, net amounts of cash receipts and cash payments for deposit or lending activities of those entities shall be reported separate from gross amounts of cash receipts and cash payments for other investing and financing activities of the consolidated entity, including those of a subsidiary of a bank, savings institution, or credit union that is not itself a bank, savings institution, or credit union. ##### [230-942-45-3](https://asc.understandingaccounting.org/asc/230/942/#230-942-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:09.821Z to 2026-09-09T23:13:09.821Z Record version: sha256:980ac3c19331c59ff1c974b96f064aa37f61d8d86e0977441a7bcdc19136ce5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Section 230-10-45 for additional presentation guidance. ##### [230-942-45-4](https://asc.understandingaccounting.org/asc/230/942/#230-942-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:09.821Z to 2026-09-09T23:13:09.821Z Record version: sha256:31d990b181043ec9468f73e445b41b6a7f31e4f0416b66298b610d15d7081def Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities within the scope of this Subtopic shall classify principal payments received under sales-type leases and direct financing leases within investing activities. Source downloaded (UTC): 2026-09-09T23:13:13.043Z to 2026-09-09T23:13:13.043Z Record version: sha256:0a1e3dce23e3d2321f1c8ace9970368d946915f7e9d4947231a80c38714b2f63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 230-942-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/230/942/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [230-942-55-1](https://asc.understandingaccounting.org/asc/230/942/#230-942-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:13.043Z to 2026-09-09T23:13:13.043Z Record version: sha256:a3368b9909df2504fae35dffdc9f19f6767c1bbf05d29269b2c2ab45b2da21eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [230-10-45-25 through 45-26](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-25) and [230-10-45-28 through 45-32](https://asc.understandingaccounting.org/asc/230/10/#230-10-45-28) for a statement of cash flows under the direct method for a financial institution. The Example is intended as an illustration only. Also, the illustration 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. ##### [230-942-55-2](https://asc.understandingaccounting.org/asc/230/942/#230-942-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:13.043Z to 2026-09-09T23:13:13.043Z Record version: sha256:2d1c0c937b263a26ab94672b27c3b5bcf33a46823ea4cd59094b428cc881512a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Presented below is a statement of cash flows for Financial Institution, Inc., a U.S. corporation that provides a broad range of financial services. 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-63EEC325-E03E-4D0E-A86C-890B796FC35E-low.gif) "FINANCIAL INSTITUTION, INC." STATEMENT OF CASH FLOWS "FOR THE YEAR ENDED DECEMBER 31, 19X1" Cash flows from operating activities: Interest received " $5,350 " Fees and commissions received " 1,320 " Proceeds from sales of trading securities " 20,550 " Purchase of trading securities " (21,075)" Financing revenue received under leases 60 Interest paid " (3,925)" Cash paid to suppliers and employees (795) Income taxes paid (471) Net cash provided by operating activities " $1,014 " Cash flows from investing activities: Proceeds from sales of investment securities " 2,225 " Purchase of investment securities " (4,000)" Net increase in credit card receivables " (1,300)" Net decrease in customer loans with maturities of 3 months or less " 2,250 " Principal collected on longer term loans " 26,550 " Longer term loans made to customers " (36,300)" Purchase of assets to be leased " (1,500)" Principal payments received under leases 107 Capital expenditures (450) "Proceeds from sale of property, plant, and equipment" 260 Net cash used in investing activities " (12,158)" Cash flows from financing activities: "Net increase in demand deposits, negotiable order of withdrawal accounts, and savings accounts" " 3,000 " Proceeds from sales of certificates of deposit " 63,000 " Payments for maturing certificates of deposit " (61,000)" Net increase in federal funds purchased " 4,500 " Net increase in 90-day borrowings 50 Proceeds from issuance of nonrecourse debt 600 Principal payment on nonrecourse debt (20) Proceeds from issuance of 6-month note 100 Proceeds from issuance of long-term debt " 1,000 " Repayment of long-term debt (200) Proceeds from issuance of common stock 350 Payments to acquire treasury stock (175) Dividends paid (240) Net cash provided by financing activities " 10,965 " Net decrease in cash and cash equivalents (179) Cash and cash equivalents at beginning of year " 6,700 " Cash and cash equivalents at end of year " $6,521 " Reconciliation of net income to net cash provided by operating activities: Net income " $1,056 " Adjustments to reconcile net income to net cash provided by operating activities: Depreciation $100 Provision for credit losses 300 Provision for deferred taxes 58 Loss on sale of investment securities 75 Gain on sale of equipment (50) Increase in trading securities (including unrealized appreciation of $25) (700) Increase in taxes payable 175 Increase in interest receivable (150) Increase in interest payable 75 Decrease in fees and commissions receivable 20 Increase in accrued expenses 55 Total adjustment (42) Net cash provided by operating activities " $1,014 " Supplemental schedule of noncash investing and financing activities: Conversion of long-term debt to common stock $500 Disclosure of accounting policy: For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, and federal funds sold. Generally, federal funds are purchased and sold for one-day periods. ##### [230-942-55-3](https://asc.understandingaccounting.org/asc/230/942/#230-942-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:13.043Z to 2026-09-09T23:13:13.043Z Record version: sha256:24eac38871f5bcc9932dcf21741a33b697634c2366e9ad01243ffb45b7e7c8e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Maintenance Update 2017-06.](https://asc.understandingaccounting.org/updates/maintenance-updates-2017/) ##### [230-942-55-4](https://asc.understandingaccounting.org/asc/230/942/#230-942-55-4) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:13.043Z to 2026-09-09T23:13:13.043Z Record version: sha256:83ada8547aaafed8042c885270b91f76ffdaa284a634457c93b5e2488f3c541a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Summarized below is financial information for the current year for Financial Institution, Inc., which provides the basis for the statement of cash flows presented in paragraphs [942-230-55-2 through 55-3](https://asc.understandingaccounting.org/asc/230/942/#230-942-55-2) . - ![](https://asc.understandingaccounting.org/asc-img/GUID-0E408551-BE5B-4A29-9F40-696FE1F29E0C-low.gif) "FINANCIAL INSTITUTION, INC. " STATEMENT OF FINANCIAL POSITION 1/1/X1 12/31/X1 Change Assets: Cash and due from banks " $4,400 " " $3,121 " " $(1,279)" Federal funds sold " 2,300 " " 3,400 " " 1,100 " Total cash and cash equivalents " 6,700 " " 6,521 " (179) Trading securities " 4,000 " " 4,700 " 700 Available-for-sale debt securities " 5,100 " " 6,800 " " 1,700 " Allowance for credit losses on available-for-sale debt securities (100) (100) - "Available-for-sale debt securities, net" " 5,000 " " 6,700 " " 1,700 " Credit card receivables " 8,500 " " 9,800 " " 1,300 " Loans " 28,000 " " 35,250 " " 7,250 " Allowance for credit losses on loans and credit card receivables (800) (850) (50) "Loans and credit card receivables, net" " 35,700 " " 44,200 " " 8,500 " Interest receivable 600 750 150 Fees and commissions receivable 60 40 (20) Investment in direct financing lease - 421 421 Investment in leveraged lease - 392 392 "Plant, property, and equipment, net" 525 665 140 Total assets " $52,585 " " $64,389 " " $11,804 " Liabilities: Deposits " $38,000 " " $43,000 " " $5,000 " Federal funds purchased " 7,500 " " 12,000 " " 4,500 " Short-term borrowings " 1,200 " " 1,350 " 150 Interest payable 350 425 75 Accrued expenses 275 330 55 Taxes payable 75 250 175 Dividends payable - 80 80 Long-term debt " 2,000 " " 2,300 " 300 Deferred taxes - 58 58 Total liabilities " 49,400 " " 59,793 " " 10,393 " Stockholders' equity: Common stock " 1,250 " " 2,100 " 850 Treasury stock - (175) (175) Retained earnings " 1,935 " " 2,671 " 736 Total stockholders' equity " 3,185 " " 4,596 " " 1,411 " Total liabilities and stockholders' equity " $52,585 " " $64,389 " " $11,804 " - ![](https://asc.understandingaccounting.org/asc-img/GUID-0F5AFC6D-6775-4FE3-B015-F2B6574FE6CE-low.gif) "FINANCIAL INSTITUTION, INC." STATEMENT OF INCOME "FOR THE YEAR ENDED DECEMBER 31, 19X1" Revenues: Interest income " $5,500 " Fees and commissions " 1,300 " Net gain on sales of trading and investment securities 75 Unrealized appreciation of trading securities 25 Lease income 60 Gain on sale of equipment 50 Total revenues " $7,010 " Expenses: Interest expense " 4,000 " Provision for credit losses 300 Operating expenses 850 Depreciation 100 Total expenses " 5,250 " Income before income taxes " 1,760 " Provision for income taxes 704 Net income " $1,056 " ##### [230-942-55-5](https://asc.understandingaccounting.org/asc/230/942/#230-942-55-5) Pending content: no Source downloaded (UTC): 2026-09-09T23:13:13.043Z to 2026-09-09T23:13:13.043Z Record version: sha256:bcb5fcd7be3301eea38d0721bb09f203f8dca32d9719390f507f9d4089117bea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following transactions were entered into by Financial Institution, Inc., during 19X1 and are reflected in the preceding financial statements: 1. a Financial Institution sold trading securities with a carrying value of $20,400 for $20,550 and purchased trading securities for $21,075. Financial Institution recorded unrealized appreciation on trading securities of $25. Financial Institution also sold investment securities with a book value of $2,300 for $2,225 and purchased new investment securities for $4,000. 2. b Financial Institution had a net decrease in short-term loans receivable (those with original maturities of 3 months or less) of $2,250. Financial Institution made longer term loans of $36,300 and collected $26,550 on those loans. Financial Institution wrote off $250 of loans as uncollectible. 3. c Financial Institution purchased property for $500 to be leased under a direct financing lease. The first annual rental payment of $131 was collected. The portion of the rental payment representing interest income totaled $52. 4. d Financial Institution purchased equipment for $1,000 to be leased under a leveraged lease. The cost of the leased asset was financed by an equity investment of $400 and a long-term nonrecourse bank loan of $600. The first annual rental payment of $90, of which $28 represented principal, was collected and the first annual loan installment of $74, of which $20 represented principal, was paid. Pretax income of $8 was recorded. 5. e Financial Institution purchased new property, plant, and equipment for $450 and sold property, plant, and equipment with a book value of $210 for $260. 6. f Customer deposits with Financial Institution consisted of the following. - ![](https://asc.understandingaccounting.org/asc-img/GUID-B89D5CEB-E79C-4C63-A432-0AF642C9EC4E-low.gif) 1/1/X1 12/31/X1 Increase Demand deposits " $8,000 " " $8,600 " $600 Negotiable order of withdrawal accounts and savings accounts " 15,200 " " 17,600 " " 2,400 " Certificates of deposit " 14,800 " " 16,800 " " 2,000 " Total deposits " $38,000 " " $43,000 " " $5,000 " Sales of certificates of deposit during the year totaled $63,000; certificates of deposit with principal amounts totaling $61,000 matured. For presentation in the statement of cash flows, Financial Institution chose to report gross cash receipts and payments for both certificates of deposit with maturities of three months or less and those with maturities of more than three months. 7. g Short-term borrowing activity for Financial Institution consisted of repayment of a $200 90-day note and issuance of a 90-day note for $250 and a 6-month note for $100. 8. h Financial Institution repaid $200 of long-term debt and issued 5-year notes for $600 and 10-year notes for $400. 9. i Financial Institution issued $850 of common stock, $500 of which was issued upon conversion of long-term debt and $350 of which was issued for cash. 10. j Financial Institution acquired $175 of treasury stock. 11. k Financial Institution declared dividends of $320. The fourth quarter dividend of $80 was payable the following January. 12. l Financial Institution's provision for income taxes included a deferred provision of $58. 13. m In accordance with the definition of the term [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."), interest paid includes amounts credited directly to demand deposit, negotiable order of withdrawal accounts, and savings accounts.