The statement of cash flows is a window into a company’s performance and helps financial statement users make investing and lending decisions; but, it’s also a frequent source of restatements. 

So, why do we continue to see so many issues? Listen as Heather Horn and Suzanne Stephani go back to the basics to cover statement of cash flows fundamentals, common questions, and helpful reminders. Topics include:

• 0:40 - Overall classification model. The statement of cash flows is the only financial statement that is done on a cash basis, so all ins and outs from a bank account have to be classified into either investing, financing, or operating cash flows. We begin by giving a refresher on how that works. 
• 5:56 - Identifying cash and cash equivalents. It’s not always as straight forward as you may think to determine what does or does not need to be reflected on the statement of cash flows. Suzanne fills us in. 
• 9:15 - Deferred costs. Where do deferred costs show up on a company’s financial statement? Suzanne helps listeners understand how deferred costs should be classified in the cash flow statement. 
• 11:12 - Business combinations. Business combinations often generate cash flows that may be reflected in all sections of the cash flow statement. Suzanne takes us through common questions.
• 15:56 - Non-cash transactions. The statement of cash flows guidance requires separate disclosure of investing and financing non-cash transactions.    We wrap up by looking at the requirements and examples in this area.

Suzanne Stephani is a director in PwC’s National office with more than 20 years of experience assisting companies in resolving complex accounting issues. Suzanne specializes in the accounting for debt, preferred stock, leases, and cash flows. Suzanne is also the lead producer and director of PwC's popular quarterly accounting and reporting developments webcast. 

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].