Memo to FASB: a cash flow statement suggestion
Article Abstract:
Criticisms of cash flow formats in current practice (the reconciliation format, the direct format, the funds statement format, and the classified format) are given and recommendations are made to the Financial Accounting Standards Board on the ideal cash flow statement and the definition of cash. It is recommended that cash be defined as the adjusted balance in a cash account plus cash equivalents (such as short-term, near-cash investments and savings accounts). The cash flow statement should describe continuously the cash flows associated with the main activities of the company and the effect on cash flows of the financing and investing activities of the firm.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1986
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Cash flows: a new reporting format for turbulent times
Article Abstract:
The Financial Accounting Standards Board has introduced a new standard for reporting cash flows. The standard reduces the number choices that accountants have in defining funds and selecting report formats. The new standard represents an improvement of previous cash flow reporting requirements, but still has several shortcomings, including the inability to assess liquidity, impaired comparability, lack of timeliness, and lack of segment reporting. Proposals to improve statements of cash flows are discussed that would improve the timeliness of cash flow statements and disclose segmented information more accurately.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1988
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Self-insurance should be accrued
Article Abstract:
The rising cost of liability insurance has led many companies to adopt some form of self-insurance, which has in turn led to questions over the accounting treatment of self-insurance plans. Self-insurance should be recognized as a legitimate business expense that has been accrued. Accrual would improve the comparability of self-insured and commercially insured firms, and would provide full disclosure of assumed levels of risk. By recognizing self-insurance as an expense, the treatment of self-insurance would be consistent with other after-costs, such as bad debts, pensions, and warranties.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1987
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