Wiley GAAP 2018, 16th Edition

17ASC 305 Cash and Cash Equivalents

1. Perspective and Issues
   1. Subtopic
   2. Scope
   3. Overview
2. Definitions of Terms
3. Concepts, Rules, and Examples
   1. Cash
      1. Restricted Cash
      2. Compensating Balances
      3. Cash not Immediately Available
      4. Overdrafts
      5. Petty Cash

Perspective and Issues

Subtopic

ASC 305, Cash and Cash Equivalents, contains one subtopic:

• ASC 305-10, Overall, that provides implementation guidance on cash on deposit at a financial institution.

Scope

ASC 305 applies to all entities and has no scope exceptions.

Overview

To provide information about liquidity, assets on the statement of financial position are often divided into current and noncurrent assets. Current assets consist of cash and other assets that are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business. Cash is the most liquid of assets, and cash items are generally classified as current assets.

Definitions of Terms

See Appendix A, Definitions of Terms, for definitions of Cash and Cash Equivalents.

Concepts, Rules, and Examples

Cash

To be included as cash in the statement of financial position, funds must be represented by coins, currency, undeposited checks, money orders, drafts, and demand deposits that are immediately available without restriction. Recognition and measurement of cash is generally straightforward. However, it is necessary to inform readers of the financial statements about any limitations on the ability to use cash in current operations.

Restricted ...