To help you become familiar with the accounting standards, this case is designed to take you to the FASB’s Web site and have you access various publications. Access the FASB’s Web site at www.fasb.org. Click on “Pronouncements & EITF Abstracts.” The topic of this chapter was the statement of cash flows. For this case, we will use Statement of Financial Accounting Standards No. 95, “Statement of Cash Flows.” Open FASB Statement No. 95.
1. Read paragraph 8. What investments would qualify as cash equivalents?
2. Read paragraph 33. What is the FASB’s ruling regarding the reporting of cash flow per share?
3. Read the dissenting opinion that begins on page 12 of the statement. How many of the seven members of the FASB voted against the issuance of FASB Statement No. 95? For those who dissented, what issue did they raise with regard to the classification of interest received and paid and of dividends paid?