Is GAAP and FASB the same?

GAAP is a set of procedures and guidelines used by companies to prepare their financial statements and other accounting disclosures. The standards are prepared by the Financial Accounting Standards Board (FASB), which is an independent non-profit organization.

What is asc220?

This Topic notes that its purpose is to establish “standards for reporting and presentation of comprehensive income and its components in a full set of general-purpose financial statements.”

How does GAAP define cash?

U.S. GAAP defines cash equivalents as “short-term, highly liquid investments that are readily convertible to known amounts of cash and that are so near their maturity that they present insignificant risk of changes in value because of changes in interest rates” and includes a money market fund as an example of a cash …

What is the difference between withdrawal and expense?

A withdrawal can also refer to the draw down of an owner’s account in a sole proprietorship or partnership. In this situation, the funds are intended for personal use. The withdrawal is not an expense for the business, but rather a reduction of equity.

What is included in AOCI?

Accumulated other comprehensive income (OCI) includes unrealized gains and losses reported in the equity section of the balance sheet that are netted below retained earnings. Other comprehensive income can consist of gains and losses on certain types of investments, pension plans, and hedging transactions.

What is not included in comprehensive income?

Exclusions from Comprehensive Income There are some items that are not included in comprehensive income, such as changes in equity caused by the owner, including the purchase of treasury shares or the sale of stock. Income resulting from non-owner sources does increase the company’s value.

How does FASB define cash equivalents?

Definition of Cash Cash equivalents were “generally” (the word used by FASB) defined as short-term, highly liquid investments meeting certain maturity, risk, and convertibility criteria; however, not all investments with similar characteristics are required to be considered cash equivalents.

What is considered as cash and cash equivalents?

Key Takeaways. Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company’s assets that are cash or can be converted into cash immediately. Cash equivalents include bank accounts and marketable securities such as commercial paper and short-term government bonds.