Cash and reporting
3 important questions on Cash and reporting
Reporting: Cash Equivalents
-Short-Term, Highly liquid investments that are:
- Readily Convertible to known amounts of cash
- So near maturity date their is risks of changes in value due to changes in interest rates. (i.e., Original Maturities <= 3 Months)
Reporting: Restricted Cash
-Held by a compnay for specific purpose and is therefore not available for immediate genreal use.
-Report as:
-Report as:
- Compensating Balances against Short-term borrwoings should be reported in current assets as. "Cash & Cash Equivalent"
- Compensating Balances against long-term borrowings should be reported as noncurrent assets in "investments" or "Other assets"
Reporting: Bank Overdraft
-Report as Current Liability->A/P
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