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In each episode of our Year-end toolkit series, our guests share insights on key areas of the year-end accounting and reporting process.

In this episode, guest host Kevin Vaughn, PwC National Office partner, sits down with Suzanne Stephani, PwC National Office director, to discuss the significance of the statement of cash flows, focusing on the practical challenges and judgments involved in the classification of cash flows.

In this episode, you will hear:

2:05 - Frequent challenges and restatements related to the statement of cash flows
5:10 - Insights from the SEC Chief Accountant, Paul Munter, on risk management and controls related to the statement of cash flows as well as considerations for assessing the materiality of cash flow restatements
14:15 - Fundamental principles of the statement of cash flows, including the identification of cash equivalents and related disclosure considerations
21:40 - Gross versus net presentation on the statement of cash flows, including considerations for non-cash and nonrecurring transactions
27:25 - Key areas of judgment, including:
- 27:25 - Applying the concept of constructive receipts and disbursements when dealing with third-party or agent transactions
- 32:58 - The impact of debt transactions, including debt extinguishments and restructurings, on the statement of cash flows
- 40:50 - Considerations when dealing with lease modifications, business combinations, discontinued operations, and classification of cash flows associated with treasury bills

For more information, read chapter 6 of our Financial statement presentation guide. Additionally, follow this podcast on your favorite podcast app for upcoming episodes in our Year-end toolkit series.

Suzanne Stephani is a director in PwC’s National Office specializing in the statement of cash flows, as well as the application and interpretation of the accounting guidance related to financing and leasing transactions.

Kevin Vaughn is a partner in PwC’s National Office. Prior to joining PwC, Kevin was senior associate chief accountant in the Office of the Chief Accountant (OCA) at the SEC where he spent almost 20 years focusing on complex financial reporting and technical accounting issues.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.

2023 Year-end toolkit: Conquering the statement of cash flows 53:43 Share

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2023 Year-end toolkit: Conquering the statement of cash flows