Alert: FASB Accounting Standards Update No. 2016-15 – Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments

Category: US GAAP

Alert: FASB Accounting Standards Update No. 2016-15 – Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments

On August 26, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The ASU seeks to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows.

The ASU provides guidance on the appropriate presentation for the following specific cash flow issues:

  • A transferor’s benefit interest obtained in a securitization of financial assets should be disclosed as a non-cash activity.

The amendments are effective as follows:

  • Public business entities – fiscal years beginning after December 15, 2017, including interim periods therein.
  • All other entities – fiscal years beginning after December 15, 2018 and interim periods within fiscal years beginning after December 15, 2019.

Earlier adoption is allowed for all entities, including adoption in an interim period. If early adopting in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The retrospective transition approach is used when applying the ASU, unless impracticable to do so. If impracticable, the amendments should be applied prospectively as of the earliest date practicable.

To access the full script of ASU No. 2016-15, click here.

For more information on the financial reporting library, contact a local MNP Assurance Professional, or Michelle Balmer, Vice President, Assurance.

This communication contains a general overview of the topic and is current as of December 30, 2016. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. Accordingly, this publication is not a substitute for professional advice and we recommend that any decisions you take about the application or not of any of the information presented be made in consultation with a qualified professional, who can address any variance that may be required to reflect your circumstances. Please contact your local MNP representative for customized assistance with the application of this material. MNP LLP accepts no responsibility or liability for any loss related to any person's use of or reliance upon this material. © MNP LLP 2016. All rights reserved.


Michelle Balmer

Michelle Balmer CPA, CA

Vice President, Assurance

Michelle Balmer, CPA, CA, is a Senior Assurance Services Partner with MNP. With 14 years of experience in public practice, Michelle helps a broad range of public and privately held companies in a variety of industries. She also works on special projects, including costing studies, benchmarking and best-practice studies, operational analyses, litigation support and due diligence.

As a key member of MNP's Assurance team, Michelle has played an instrumental role in assurance policy development, implementing accounting and assurance standards firm-wide and educating assurance practitioners regarding methodologies and new pronouncements. She also provides technical advice and consultation on accounting and assurance issues, as well as on rules of professional conduct issues, to all MNP practitioners.

Michelle was certified a Chartered Accountant (CA) after obtaining a Bachelor of Commerce degree from the University of Alberta. She has been actively involved with the Institute of Chartered Accountants of Alberta, including the Chartered Accountants School of Business, in an instructional and marketing capacity. An avid volunteer, she has assisted numerous groups such as the Easter Seals of Alberta, Paralympic Sports Association and Junior Achievement of Northern Alberta.