This update was issued in November of 2016 and clarifies the diversity in practice as to how cash and restricted cash are presented in the cash flow statement. It applies when cash and cash equivalents and restricted cash and cash equivalents are shown as separate lines on the statement of financial position. The update states that restricted cash and restricted cash equivalents should be included with cash and cash equivalents when recording the beginning of the period and end of the period total amounts shown on the statement of cash flows. Disclosures will be required to explain the change during the period in total cash and the amounts generally described as restricted cash or restricted cash equivalents. The disclosure may be made, either on the face of the statement of cash flow or in the notes to the financial statements, and can be in a narrative or a tabular format.
This Update is effective for public business entities for the fiscal years beginning after December 15, 2017, and the interim periods within those fiscal years. It is applicable for all other entities for the fiscal years beginning after December 15, 2018, and interim periods within the fiscal years beginning after December 15, 2019. Early adoption is permitted.