02.04 Statement of Cash Flows

Question 1

What is the principal difference between the not-for-profit SCF and the for-profit SCF?

Answer 1

The principal difference is that contributions restricted from long-term purposes (e.g. subject to capital restrictions) are reported in the financing activities section. Unrestricted contributions and contributions subject to temporary (purpose or time) restrictions are reported in the operating activities section.

Question 2

What methods may be used to prepare the SCF?

Answer 2

The direct or indirect method.

Question 3

What is included in operating activities on the SCF?

Answer 3

Operating activities represent most of the cash flow effects of the items reported in the statement of activities. Inflows include unrestricted contributions, revenue from exchange transactions, revenue restricted for operating purposes. Outflows include expenses paid and grants to other organizations.

Question 4

What is included in investing activities on the SCF?

Answer 4

Investing activities generally represent cash flow effects of asset transactions. Inflows include proceeds from the sales of assets or works of art. Outflows include payments for asset purchases.

Question 5

What is included in financing activities on the SCF?

Answer 5

Financing activities generally represent the cash flow effects of liability transactions and include two subsections: 1. proceeds from contributions subject to long-term donor restrictions and 2. other financing activities, which includes proceeds from (inflows) and principal payments on (outflows) loans or other long-term debt.