Statement of Cash Flows—Targeted Improvements
Last updated on November 14, 2023. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.
(Sections updated on the date above are indicated with an asterisk *)
The objective of this project is to make targeted improvements to the statement of cash flows to provide investors with decision-useful information. The project will explore (1) reorganizing and disaggregating the statement of cash flows for financial institutions to improve the decision usefulness of that statement and (2) developing a disclosure about an entity’s cash interest received.
Many financial institution preparers and investors have maintained that many of the activities of a nonfinancial institution that are classified as investing or financing are operating activities of a financial institution (for example, investing and certain borrowing activities). Additionally, activities unique to a financial institution that are not currently classified in the operating section, such as accepting deposits and making loans, are central to the operations of a financial institution. Many preparers and investors have stated that the differences between classification requirements and the underlying purpose result in a statement that is not decision useful.
Additionally, investors have indicated that more information about cash interest received would provide them with decision-useful information.
The Board decided to add a project to its technical agenda to make targeted improvements to the statement of cash flows to provide investors with decision-useful information.
Scope
The Board decided that the scope of the project is to (1) reorganize and disaggregate the statement of cash flows for financial institutions to improve the decision usefulness of that statement and (2) develop a disclosure about an entity’s cash interest received.
The FASB chair retained a project about the statement of cash flows on the Board’s research agenda to explore further potential improvements.
A summary of decisions reached to date can be found here.
Last updated on November 14, 2023. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.
(Sections updated on the date above are indicated with an asterisk *)
Objective:
The objective of this project is to make targeted improvements to the statement of cash flows to provide investors with decision-useful information. The project will explore (1) reorganizing and disaggregating the statement of cash flows for financial institutions to improve the decision usefulness of that statement and (2) developing a disclosure about an entity’s cash interest received.
Background:
Many financial institution preparers and investors have maintained that many of the activities of a nonfinancial institution that are classified as investing or financing are operating activities of a financial institution (for example, investing and certain borrowing activities). Additionally, activities unique to a financial institution that are not currently classified in the operating section, such as accepting deposits and making loans, are central to the operations of a financial institution. Many preparers and investors have stated that the differences between classification requirements and the underlying purpose result in a statement that is not decision useful.
Additionally, investors have indicated that more information about cash interest received would provide them with decision-useful information.
Exposure Draft(s):
There are no exposure documents at this time.
There are no media releases or educational materials at this time.
Decisions Reached at Last Meeting (November 8, 2023):
The Board decided to add a project to its technical agenda to make targeted improvements to the statement of cash flows to provide investors with decision-useful information.
Scope
The Board decided that the scope of the project is to (1) reorganize and disaggregate the statement of cash flows for financial institutions to improve the decision usefulness of that statement and (2) develop a disclosure about an entity’s cash interest received.
The FASB chair retained a project about the statement of cash flows on the Board’s research agenda to explore further potential improvements.
Tentative Board Decisions Reached to Date (as of November 8, 2023):
A summary of decisions reached to date can be found here.
The Board meeting minutes, handouts, and videos are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
The following are links to the minutes for each meeting. To view Board meetings and handouts from the past 90 days, click here.
The following are links to the minutes for each meeting. To view Board meetings and handouts from the past 90 days, click here.
| November 8, 2023* | Board Meeting—The Board decided to add a project to its technical agenda to make targeted improvements to the statement of cash flows to provide investors with decision-useful information. |
The Board directed the staff to perform further research and outreach to determine the scope of entities that would be subject to the proposed changes and to explore possible revised definitions of investing and financing activities for the entities within the scope of this project.
The Board will consider those issues at a future Board meeting.
The Board will consider those issues at a future Board meeting.
Jeff Gabello
Supervising Project Manager
jjgabello@fasb.org
Richard Gabriel
Assistant Project Manager
rgabriel@fasb.org
Michael Chmelar
Practice Fellow
mchmelar@fasb.org
Connor Shea
Postgraduate Technical Assistant
cshea@fasb.org
Nathan Clark
Postgraduate Technical Assistant
nclark@fasb.org
Supervising Project Manager
jjgabello@fasb.org
Richard Gabriel
Assistant Project Manager
rgabriel@fasb.org
Michael Chmelar
Practice Fellow
mchmelar@fasb.org
Connor Shea
Postgraduate Technical Assistant
cshea@fasb.org
Nathan Clark
Postgraduate Technical Assistant
nclark@fasb.org
The staff has prepared this summary for information purposes only. Any Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.