Year-end toolkit: Cash flow classification

12 snips

Jan 20, 2026

Guest

Suzanne Stephani

Guest

Christopher Gerdau

Suzanne Stephani, a statement-of-cash-flows and financing specialist, and Christopher Gerdau, an expert in financial instruments and SEC reviews, walk through tricky cash flow presentation topics. They cover SEC comment themes, debt restructurings and net vs gross treatment, payment-processing classifications, business combination cash-flow issues, and upcoming FASB projects.

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ADVICE

Integrate Cash Flow Thinking Early

Don't treat the cash flow statement as an afterthought; involve cash flow thinking throughout the transaction process.
Establish strong controls and coordinate teams so the cash flow preparer benefits from accounting analyses and decisions.

INSIGHT

SEC Scrutinizes Consistency

SEC reviewers focus on consistency between disclosures and cash flow presentation and will question unexplained differences.
Bridge noncash components and provide transparent reconciliations when disclosures and cash flows differ.

ADVICE

Break Out Significant Operating Items

Disaggregate significant operating reconciling items in the indirect method to improve investor transparency.
Break out material items rather than burying them in a single net adjustment line.

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We continue our year-end toolkit series sharing insights on key areas of the year-end accounting and reporting process. In this episode, we focus on the statement of cash flows—an area that remains critical to investors and continues to get focus from regulators. We discuss recent SEC comment letter observations, practical considerations for complex transactions such as debt restructurings, payment processing arrangements, and business combinations; we also highlight reminders and best practices to help companies navigate year-end reporting.

In this episode, we discuss:

1:05 – Overview of the statement of cash flows and key reminders
3:46 – SEC comment letter themes
7:52 – Debt restructurings
15:21 – Payment processing arrangements
20:27 – Business combinations
32:56 – FASB project on targeted improvements to the statement of cash flows

For more on the statement of cash flows, see Chapter 6 of our Financial statement presentation guide.

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About our guests

Suzanne Stephani is a director in PwC’s National Office specializing in the statement of cash flows as well as the application and interpretation of the accounting guidance related to financing, leasing, and foreign currency transactions.

Christopher Gerdau is a partner in PwC’s National Office specializing in accounting for financial instruments and banking-related topics. Chris also conducts technical reviews of SEC filings and provides technical support to PwC’s practice offices. Chris’s client service expertise includes the banking, capital markets, and insurance industries.

About our guest host

Diana Stoltzfus is a partner in the National Office who helps to shape PwC’s perspectives on regulatory matters, responses to rulemakings and policy development, and implementation related to significant new rules and regulations. Prior to rejoining PwC, Diana was the Deputy Chief Accountant in the Office of the Chief Accountant (OCA) at the SEC where she led the activities of the OCA’s Professional Practices Group.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com

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