In short
Restricted cash is cash whose withdrawal or use is legally or contractually limited, such as cash held in escrow or a bond sinking fund. It is reported separately from cash available for operations.
Key takeaways
- The statement of cash flows includes restricted cash with cash and cash equivalents in its beginning and ending totals.
- Transfers between restricted and unrestricted cash aren't cash flows.
- It is current or noncurrent depending on when it will be used.
Where it's tested
FAR: Statement of Cash Flows — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under US GAAP, dividends PAID by a corporation are classified in the statement of cash flows as: