If a company has combined cash equivalents with cash, it must disclose the components of the cash equivalents, with a reconciliation of the amounts reported on the statement of cash flows with those reported on the statement of financial position.

Question

Quizplus · Accepted Answer

According to accounting standards such as IFRS and GAAP, when a company combines cash and cash equivalents in its financial statements, it must provide a disclosure that breaks down the components of cash equivalents. This ensures transparency and allows users of the financial statements to understand the liquidity and risk associated with the cash equivalents included with cash.

If a Company Has Combined Cash Equivalents with Cash, It