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Statement No. 9
Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting

STATUS

Issue Date: September 1989

Effective Date: Financial statements for fiscal years beginning after December 15, 1989

Affects: Supersedes NCGAS 1 requirements for proprietary fund reporting of statement of changes in financial position (principle 12; paragraphs 128, 139, 143, 156, 167, and 170; and fn26 of paragraph 156)

Supersedes NCGAS 1, Example 5
Amends NCGAS 6, Appendix A, Example 3
Amends NCGAS 7, paragraphs 8 and 25
Amends NCGAI 2, paragraph 8
Amends NCGAI 6, paragraphs 2 and 4 and Appendix
Amends AICPA SOP 80-2, paragraph 4

Affected by: No other pronouncements

Primary Codification Section Reference: 2450

Other Interpretive Literature: GASB Q&A 9

Abbreviations for Accounting Pronouncements
GASBS - GASB Statements
GASBI - GASB Interpretations
GASBTB - GASB Technical Bulletins
GASBCS - GASB Concepts
BFC - Basis for Conclusions
NCGAS - NCGA Statements
NCGAI - NCGA Interpretations
SOP - AICPA Statements of Position
ASLGU - AICPA Audit Guide

SUMMARY

This Statement establishes standards for cash flow reporting. It requires a statement of cash flows (instead of a statement of changes in financial position) as part of a full set of financial statements for all proprietary and nonexpendable trust funds and governmental entities that use proprietary fund accounting. It exempts public employee retirement systems and pension trust funds from the requirement to present either a statement of cash flows or a statement of changes in financial position.

This Statement requires that a statement of cash flows classify cash receipts and payments according to whether they stem from operating, noncapital financing, capital and related financing, or investing activities, and it provides definitions of each category.

Governmental enterprises are encouraged to report cash flows from operating activities directly by showing major classes of operating cash receipts and payments (the direct method), although the indirect or reconciliation method may be used. If the direct method is used, a reconciliation of operating income to net cash flow from operating activities is required to be provided.

Information about investing, capital, and financing activities not resulting in cash receipts or payments in the period is required to be provided separately.

This Statement is effective for annual financial statements for fiscal years beginning after December 15, 1989. Restatement of financial statements for earlier years provided for comparative purposes is encouraged but not required.