Presented by Cliff Flood cliff_flood@ncsu.edu

The Statement of Cash Flows Using the Articulation Method NCSU’s Cash Flow Template Checklist for Using the Template Questions References

Sources and Uses of Cash Funds◦ Operating Activities◦ Non-Capital Financing Activities◦ Capital Financing Activities◦ Investing Activities

Non-Capital Financing Activities◦ Non-Capital Subsidies◦ Non-Capital Loans◦ Non-Operating Grants◦ Non-Capital Gifts◦ Additions to

Endowments◦ Agency Fund

Transactions

Capital Financing Activities◦ Capital Subsidies◦ Capital Grants / Gifts◦ Capital Debt Proceeds◦ Capital Sales Proceeds◦ Acquisitions /

Construction◦ Principal on Cap Debt◦ Interest / Fees on

Capital Debt

Investing Activities◦ Sales Proceeds◦ Investment Income◦ Purchases◦ Deposits / Withdrawals

from an Investment Fund

Operating Activities◦ Residual◦ Received from

Customers◦ Payments to Employees◦ Payments to Vendors◦ Payments for

Scholarships◦ Program Loans◦ Interest on Program

Loans◦ Other Receipts

Non-Cash Adjustments◦ Depreciation◦ Allowances / Write-

Offs to Revenue Accounts

Changes to Assets and Liabilities◦ Receivables◦ Inventories◦ Accounts Payable and

Accrued Liabilities◦ Unearned Revenue◦ Compensated Absences◦ Deposits Payable

Not for Operating Activities Capital Financing Activities

◦ Assets Acquired through a Liability◦ Assets Acquired through a Gift◦ Loss on Disposal of Capital Assets

Investing Activities◦ Change in Fair Value of Investments

What About Other Non-Cash Items◦ Amortization◦ Amounts Withheld from Bond Proceeds◦ Changes in Non-Operating Receivables◦ Changes in Non-Operating Payables

SRECNA◦ Classify SRECNA

Financial Statement Accounts by Cash Flow Activities

SNA◦ Classify SNA

Financial Statement Accounts by Cash Flow Activities

◦ Determine Change in Non-Cash Accounts

◦ Remove Change from SREACNA Amounts

Increases Cash◦ Decrease in Assets◦ Increase in

Liabilities

Decreases Cash◦ Increase in Assets◦ Decrease in

Liabilities

Debt (TAB A) Investments (TAB B) Payables (TAB C) Capital Assets (TAB D) Student Loans (TAB E) Agency Funds (TAB F) Receivables (TAB G) Other Items (TAB H)

MS-Excel Format Links Cross-referenced Automated Calculation Tabs for Reclassifications Reconciliations in Tabs Checks Used to Confirm Balances in Tabs

1 – Which category of cash flows activities represents residual transactions?

2 – What distinguishes a cash flow transaction from a non-cash transaction? Give an example of when a transaction occurs that is not representative of a cash flow transaction?

3 – How do you report non-cash activities in the cash flows statement?

4 – What are some tasks that you need to consider when planning to prepare the Cash Flows Statement?

5 – When using the cash flows worksheet template, what indicators would you check to see that the worksheet remains in balance?

6 – When making adjustments in the worksheet template, do you need to make sure that the correct accounting sign is utilized?

7 – When using the worksheet template, can you change the format or protected cells in the worksheet?

8 – When using the worksheet template, what do you do if a significant difference is determined in comparison to the prior year?

9 – How do you report interest earned on loan balances in the cash flow statement? How about interest earned on cash and cash equivalent balances?

10 – How do you determine amounts needed for reporting on the cash flows statement?

GASB 9 GASB Implementation Guide – Chapter 2 May 2000 Article in the NACUBO Business

Manager – The Direct Method of Cash Flows (Bosserman / Fischer)

Miller Governmental GAAP Guide – 2006