Current generally accepted accounting principles either are unclear or do not include specific guidance on the seven cash flow classification issues included in this Accounting Standards Update. The new guidance also clarifies how the predominance principle should be applied when the most appropriate classification of cash flows is unclear because cash receipts and payments have aspects of more than one class of cash flows. Judgment may still be required.
The guidance will generally be applied retrospectively and is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those years. For all other entities, it is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted.