Global Journal of Management and Business Research, C: Finance, Volume 22 Issue 5

3. Cash payments to governments for taxes, duties, fines, and other fees or penalties 4. Cash payments to lenders and other creditors for interest 5. All other cash payments that do not stem from transactions defined as investing or financing activities, such as payments to settle lawsuits, cash contributions to charities, and cash refunds to customers. Certain cash receipts and payments may have aspects of more than one class of cash flows. For example, a cash payment may pertain to an item that could be considered either inventory or a productive asset. If so, the appropriate classification shall depend on the activity that is likely to be the predominant source of cash flows for the item. For example, the acquisition and sale of equipment to be used by the enterprise or rented to others generally are investing activities. However, equipment sometimes is acquired or produced to be used by the enterprise or rented to others for a short period and then sold. In those circumstances, the acquisition or production and subsequent sale of those assets shall be considered operating activities.” Nel 2008, the FASB changed the codification of its accounting policies. The codification became effective for interim and annual periods ending after 15 September 2009. FASB Documentation No. 168 explained and explained the reasons why SFASs would be replaced with ASCs. All previous accounting standards documents were replaced as described in FASB Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. The Codification reorganised hundreds of US GAAP pronouncements into approximately 90 accounting topics and presented all topics with a formal structure with theoretical and practical consistency. The transition from SFAS to ASCs did not change GAAP, but introduced a new, clearer and more intelligible formal structure., The FASB had the goal of reducing the time required to search through the set of ASC standards for topics of interest to those researching and prepared the ASC standards in a manner that reduced the risk of non-compliance with the standards. It should note that the ASC standards are now the only source of GAAP ASC No. 230 governed the cash flow statement and had a 2016 update. This update was made when the FASB aimed to reduce, when possible, the diversity in practice resulting from different interpretations of certain parts of the standard. In reality, this update did not change the structure of Topic 230, which echoed almost wholly when set out in SFAS 95 above. The 2016 amendments concerned the specification of specific items: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates, contingent consideration payments made after a business combination; proceeds from the settlement on insurance claims; proceeds from the territory of corporative-owned life insurances, including bank- owned life insurance policies; distributions received from equity method investees; beneficial interests in securitisation transactions and separately identifiable cash flow and application fo predominance principle. Apart from some specifications on the items identified above, which, as can be seen, are very particular items that are not very common in the cash flow statements of even medium-large companies, ASC 230 reiterated what had already been established by SFAS 95, i.e.: *In the cash flow statement, it must disclose aggregate income and expenses according to the origin of the transactions. Topic 230 mentions the aggregations already provided in SFAS 95 and explained in detail on the previous pages, i.e. operating activities, investing activities and financial activities. The items that Topic 230 brings up as needs and sources to be included in the three activities mentioned above are similar to those identifiable in SFAS 95. For the sake of completeness, the items listed in ASC 230 are given below: Operating Activities 1. Cash received from sale of goods or services 2. Cash paid to suppliers and employees 3. Receipt of dividends 4. Receipt of interests 5. Payment of interests 6. Receipt of insurance proceeds 7. Income taxed paid Investing Activities 1. Acquisition of debt instruments of other entities 2. Sale of debt instruments of other entities 3. Acquisition of equity instruments of other entities 4. Sale of equity instruments of other entities 5. Acquisition of property, plant and equipment 6. Sale of property, plant and equipment 7. Capital expenditures 8. Payment for purchase of another entity Financing Activities 1. Issuance of equity instruments 2. Payment of dividends 3. Repurchase of equity instruments 4. Proceeds from short-term borrowings 5. Repayment of short-term borrowings 6. Proceeds from issuance of bonds and other long- term borrowings 7. Repayment of bonds and other long-term borrowings 24 Global Journal of Management and Business Research Volume XXII Issue V Version I Year 2022 ( ) C © 2022 Global Journals Does the Formal Structure of the Cash Flow Statement have an Impact on the Understanding of the Data Contained in the Report Explaining the Company's Financial Dynamics?