A restricted-cash reconciliation maps each balance-sheet location to the combined cash-flow population. ASC 230-10-45-4 requires the statement to explain the change in that total. Included restricted amounts remain part of the reconciliation even when displayed elsewhere.
Build a two-date location bridge
For each reporting date, list every included balance by caption and account. Show unrestricted cash, cash equivalents, and supported restricted amounts even when they appear in other current or noncurrent assets. The rows must sum to the corresponding statement totals.
ASC 230-10-50-8 requires this information when the population spans several balance-sheet lines. ASC 230-10-50-7 also requires information about the nature of restrictions.
Keep location, restriction, and activity separate
The bridge answers where the population appears. The contract, law, custody, and permitted-use evidence supports why an amount is restricted and how it is classified on the balance sheet. Neither answer creates an activity-section cash flow.
Reconcile internal transfers by location but remove them from operating, investing, and financing. Classify a payment to an external party from the restricted account according to the payment's underlying nature. Investigate any residual instead of using a plug.
Put the concept to work
Understand this concept
- Explain why generally described restricted cash joins the statement reconciliation even when it appears outside cash on the balance sheet.
Apply this concept
- Build a beginning and ending bridge from supplied balance-sheet line locations to the statement's combined population and disclose the nature of restrictions.
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Build on these ideas
- Cash-flow reporting population — Understand
To understand this concept: Required. Restricted cash is one possible location within the combined population.
- Restricted-cash reconciliation — Understand
To apply this concept: Required. The bridge depends on the combined-total model.
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Use this idea next
- Restricted cash — Apply
Required level here: apply. Required. The reconciliation is the required cash flow presentation.
- Restricted cash — Understand
Required level here: understand. Required. The cash flow statement presentation is part of what the concept covers.
- Restricted-cash reconciliation — Apply
Required level here: understand. Required. The bridge depends on the combined-total model.