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The FASB issued SFAS 95 - Statement of Cash Flows in 1987. Confusion ensued about whether proprietary funds of governmental units should apply the new standards of SFAS 95, or continue to apply the standards of APB Opinion 19, Reporting Changes in Financial Positions. The GASB eventually addressed t...

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Bibliographic Details
Published in:Pennsylvania CPA Journal 1996-08, Vol.67 (3), p.14
Main Authors: Bailey, Larry P, Poteau, Raymond R
Format: Article
Language:English
Subjects:
Accounting standards
Borrowing
Capital assets
Cash flow
Cash flow forecasting
Cash flow statements
Differences
FASB statements
Financial accounting standards
Financial reporting
Financial statements
GASB statements
Governmental accounting
Net income
Operating revenue
Proprietary
Reporting requirements
SFAS 95
SGAS 9
Subsidies
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Summary:The FASB issued SFAS 95 - Statement of Cash Flows in 1987. Confusion ensued about whether proprietary funds of governmental units should apply the new standards of SFAS 95, or continue to apply the standards of APB Opinion 19, Reporting Changes in Financial Positions. The GASB eventually addressed the issue directly in 1989 when it issued Statement 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting. A discussion identifies similarities and some significant dissimilarities between GASB 9 and SFAS 95 and suggests that the competing approaches may hinder the goals of financial reporting. Perhaps the most striking difference between SFAS 95 and GASB 9 is the financial statement format each mandates. SFAS 95 requires that cash flow activities be classified into 3 major groups: 1. operating activities, 2. investing activities, and 3. financing activities. But GASB 9 establishes 4 classifications: 1. operating activities, 2. investing activities, 3. noncapital financing activities, and 4. capital and related financing activities.
ISSN:0746-1062