By John E. Kent, Jr., CPA, Business Assurance & Advisory Service Partner | Not-for-Profit Team
In November 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.
This new standard addresses the presentation and classification of changes in restricted cash in the statement of cash flows. This ASU applies to all entities with restricted cash that are required to present a statement of cash flows. It is effective for not-for-profit organizations for fiscal years beginning after December 15, 2018. Early adoption is permitted.
The ASU requires an explanation of the change during the period in total cash, cash equivalents, and amounts described as restricted cash or restricted cash equivalents to be provided in the statement of cash flows. As such, amounts generally described as restricted cash or restricted cash equivalents are required to be included with cash and cash equivalents when reconciling the beginning and end of year total amounts presented on the statement of cash flows.
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