PwC is pleased to offer our Financial statement presentation guide. This guide serves as a compendium of many of today’s presentation and disclosure requirements included in US GAAP, including relevant references to and excerpts from the FASB’s Accounting Standards Codification (the Codification). It also provides our insights and perspectives, interpretative and application guidance, illustrative examples, and discussion on emerging practice issues.
This guide also discusses the requirements in S-X, Article 5
, for commercial and industrial companies. In most cases, the content does not include the requirements of other Articles of Regulation S-X
or other industry-specific guidance. However, some chapters address topics relevant to reporting entities in other industries, such as investments and derivatives.
Appropriate financial statement presentation and disclosure is key to achieving the objectives of financial reporting, including providing decision-useful information to investors, lenders, creditors, and other stakeholders. This guide has been prepared to support practitioners in the preparation of their financial statements. It should be used in combination with a thorough analysis of the relevant facts and circumstances, review of the authoritative accounting literature, and appropriate professional and technical advice.
The guidance in this guide is applicable to reporting entities that are going concerns and addresses financial statement presentation and disclosure related to the core financial statements. As a result, the following areas are not addressed in this guide:
- Management Discussion and Analysis (MD&A)
- Regulation S-K reporting
PwC’s Bankruptcies and liquidations
guide addresses the presentation and disclosure requirements applicable to entities reporting on a liquidation basis.
References to US GAAP
Definitions, full paragraphs, and excerpts from the FASB’s Accounting Standards Codification are clearly labelled. In some instances, guidance was cited with minor editorial modification to flow in the context of the PwC Guide. The remaining text is PwC’s original content.
References to other PwC guidance
This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. References to other guides are indicated by the applicable guide abbreviation followed by the specific section number. The other PwC guides referred to in this guide, including their abbreviations, are:
- Bankruptcies and liquidations (BLG)
- Business combinations and noncontrolling interests (BCG)
- Carve-out financial statements (CO)
- Consolidation guide (CG)
- Derivative and hedging (DH)
- Equity method investments and joint ventures (EM)
- Fair value measurements, global edition (FV)
- Financing transactions (FG)
- Income taxes (TX)
- Leases (LG)
- Loans and investments (LI)
- Not-for-profit entities (NP)
- Property, plant, equipment and other assets (PPE)
- Revenue from contracts with customers (RR)
- Stock-based compensation (SC)
- Transfers and servicing of financial assets (TS)
- Utilities and power companies (UP)
Summary of significant changes
Included below is a summary of recent noteworthy revisions to the guide. Additional updates may be made to future versions to keep pace with significant developments.
Revisions made in June 2021
- The order of certain sections within FSP 8 was rearranged, while certain sections were also combined.
- FSP 8.6.2 was updated to expand on the presentation of long-lived assets classified as held for sale including the interaction with the guidance in ASC 205-20, Discontinued operations.
- FSP 8.6.3 was added to include reference to the disclosure requirements in ASC 820, Fair value measurements, and ASC 275, Risks and uncertainties, related to impairments of long-lived assets.
- FSP 8.7.3 was updated to enhance the discussion around the presentation of capitalized implementation costs of a cloud computing arrangement.
- FSP 8.8.1 was updated to include reference to the disclosure requirements in ASC 820, Fair value measurements, and ASC 275, Risks and uncertainties, related to impairments of intangible assets.
- FSP 8.9.1 was updated to include reference to the disclosure requirements in ASC 820, Fair value measurements, and ASC 275, Risks and uncertainties, related to impairments of goodwill.
- FSP 8.10.2 was added to reflect the issuance of ASU 2021-03, Accounting Alternative for Evaluating Triggering Events, and the related disclosure requirements.
FSP 10, Equity method investments
- FSP 10.4 was updated to expand on how an investor should account for a change in the lag period of an investee.
- FSP 10.4.1.2 was updated to include discussion of the applicability of the discontinued guidance to the sale of an equity method investment.
- FSP 10.4.1.3 was updated to include suggested disclosures that a reporting entity may present when an equity method investment is other-than-temporarily impaired.
- FSP 10.4.1.8 was updated to enhance the discussion around discontinued operations presented by an investee and related disclosure considerations for the investor.
- FSP 10.6 was updated to include a reference to investments in limited partnerships, limited liability companies, trusts and similar entities when evaluating required disclosures for investments accounted for in accordance with ASC equity method investments.
- FSP 10.6.1 was updated to include a discussion on the accounting for and disclosure of a guarantee issued by an investor on behalf of an equity method investee.
- FSP 10.6.3 and FSP 10.6.4 were updated to enhance the discussion around the annual reporting disclosure and reporting requirements under Regulation S-X 4-08, S-X 3-09 and interim disclosure and reporting requirements under Regulation S-X 10-01(b)(1).
- FSP 25.1 was updated to highlight the FASB project related to segment disclosure requirements.
Revisions made in November 2020
FSP 6, Statement of cash flows
- The order of certain sections within Chapter 6 was rearranged, while certain sections were also combined.
- FSP 6.5.1 and FSP 184.108.40.206 were added to include discussion on the definition of cash and the treatment of credit card and debit card payments in transit, respectively.
- FSP 6.9.10 was updated to expand on the classification of cash flows in a troubled debt restructuring.
- Discussion of the cash flow presentation of lease-related accounts previously included in FSP 6.9.18 was moved to LG 9.2.3 and LG 9.3.3.
- FSP 6.9.21 was updated to discuss the cash flow treatment of working capital adjustments from business combinations and in carve-out financial statements.
FSP 19, Derivatives and Hedging
- Various updates were made to reflect the issuance of ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments
This publication has been prepared for general informational purposes, and does not constitute professional advice on facts and circumstances specific to any person or entity. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication. The information contained in this publication was not intended or written to be used, and cannot be used, for purposes of avoiding penalties or sanctions imposed by any government or other regulatory body. PricewaterhouseCoopers LLP, its members, employees, and agents shall not be responsible for any loss sustained by any person or entity that relies on the information contained in this publication. Certain aspects of this publication may be superseded as new guidance or interpretations emerge. Financial statement preparers and other users of this publication are therefore cautioned to stay abreast of and carefully evaluate subsequent authoritative and interpretative guidance.
The FASB Accounting Standards Codification® and the FASB Concepts Statements are copyrighted by the Financial Accounting Foundation (FAF), 401 Merritt 7, PO Box 5116, Norwalk, Connecticut, 06856-5116, U.S.A., and are reproduced with permission. Complete copies of the documents are available from the FAF.