About the Financial statement presentation guide

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.

Definitions, full paragraphs, and excerpts from the FASB’s Accounting Standards Codification are clearly labeled. 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.

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 (CG)
• Crypto assets (CA)
• Derivative and hedging (DH)
• Equity method investments and joint ventures (EM)
• Fair value measurements (FV)
• Financing transactions (FG)
• Foreign currency (FX)
• Income taxes (TX)
• Inventory (IV)
• Leases (LG)
• Loans and investments (LI)
• Not-for-profit entities (NP)
• Property, plant, equipment and other assets (PPE)
• Revenue from contracts with customers (RR)
• Software costs (SW)
• Stock-based compensation (SC)
• Transfers and servicing of financial assets (TS)
• Utilities and power companies (UP)

The following is a summary of recent noteworthy revisions to the guide. Additional updates may be made to future versions to keep pace with significant developments.

• FSP 3.6.2A, 3.6.2.1A, and 3.6.2.2A were removed since ASC 326 is now applicable for all companies.
• FSP 3.6.3 was updated to provide clarification on not presenting gross margin when cost of sales excludes some or all depreciation and amortization expense related to manufacturing.
• FSP 3.6.3.1 was updated to clarify the presentation of right-of-use asset amortization.
• FSP 3.8.2.1 was added to provide guidance on the presentation of the proportional amortization method for investments in tax credit vehicles.

• A reference to FASB Concepts Statement were removed in FSP 6.3 and FSP 6.8.10 as a result of ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements.
• New guidance as a result of ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, was added in FSP 6.9, the content in FSP 6.9 was moved to FSP 6.9A, and the content on interest paid was moved to FSP 6.9.2.

• FSP 7.3.4was updated to include guidance from ASU 2023-06, Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which added a requirement to disclose the methods used in the diluted EPS computation for each type of dilutive instrument (i.e., treasury stock method, if-converted method, two-class method, and reverse treasury stock method).
• FSP 7.4.1.2 was updated to discuss the impact of increasing rate preferred stock subject to SAB Topic 5.Q as it relates to the numerator for basic EPS.
• Example FSP 7-2 and ExampleFSP 7-3 were added to illustrate the adjustment to income available to common shareholders for noncontrolling interests related to a preferred stock issuance depending on whether the redemption is guaranteed by a parent.
• Example FSP 7-4 was added to illustrate the adjustment to income available to common shareholders for noncontrolling interests related to a common stock issuance redeemable at other than fair value.
• FSP 7.4.1.3 and FSP 7.4.1.3Awere updated to discuss redemptions of common stock in excess of fair value when no other rights or privileges are identified after and before adoption of ASU 2020-06, respectively.
• FSP 7.4.2.5was updated to discuss adjustments to the strike price on forward contracts based on anticipated dividends rather than actual declarations of dividends. In addition, content was added on noncontrolling interests that meet the definition of a participating security as well as participation based on the occurrence of a contingent event as addressed in ASC 260-10-55-26 through ASC 260-10-55-27.
• FSP 7.4.3.1was updated to address the treatment of common shares placed in escrow in connection with a business combination to cover general representations and warranties.
• FSP 7.4.3.6was updated to address the treatment of prepaid variable share forward purchase contracts that contain a minimum number of shares that the reporting entity will purchase at settlement of the contract.
• FSP 7.5.5.9 and FSP 7.5.5.9A were updated to address prepaid written put options and the reverse treasury stock method after and before adoption of ASU 2020-06, respectively.
• FSP 7.5.7.1was updated to address year-to-date computations for liability classified instruments after adoption of ASU 2020-06.
• FSP 7.5.7.4was added to address the diluted earnings per share treatment of mandatory unit structures based on the guidance in ASC 260-10-55-9.
• FSP 7.5.7.5and FSP 7.5.7.5A were added to address accelerated share repurchase contract earnings per share impacts after and before adoption of ASU 2020-06, respectively.
• FSP 7.6.7 was removed.
• FSP 7.7.4was added to address pro forma EPS presentation for changes in tax status.

• FSP 12.3.1 was updated to provide an alternative view when classifying callable debt.
• FSP 12.3.2.2 was updated to clarify how a subjective acceleration clause (SAC) works and to add additional considerations for classifying debt with a SAC.
• Example FSP 12-4 was updated to clarify how to consider a SAC upon an event of default related to an audit opinion with an emphasis of a matter paragraph.
• FSP 12.4.1 was updated to clarify classification of revolver borrowings that require execution of a note.
• FSP 12.11.2 was added to address the income statement presentation of fees associated with a term debt restructuring.

• The chapter was updated to reflect the adoption of ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures.
• FSP 16.2was added to discuss the scope of guidance of presentation and new guidance under ASU 2023-09. Subsequent sections were renumbered accordingly.
• Content previously included in FSP 16.3, FSP 16.5, and FSP 16.9 was moved to FSP 16.4A, FSP 16.6A, and FSP 16.10A, respectively, and content on the application of ASC 740 after adoption of ASU 2023-09 was added to FSP16.4, FSP 16.6, FSP16.8, and FSP 16.10.
• Content was added to FSP 16.7 to include income taxes paid disclosures after adoption of ASU 2023-09.
• Content before ASU 2023-09 previously included in FSP 16.3, FSP 16.5,FSP 16.7, and FSP 16.9 was moved to FSP 16.4A, FSP 16.6A, FSP 16.8A, and FSP 16.10A, respectively.

• FSP 17.4.5A and FSP 17.4.5.1A were removed as ASC 326 is effective for all entities.

• FSP 32.4.2.1was updated to address the presentation of pro forma information in SEC filings for conversions of a partnership or similar tax-exempt entity to a corporation following SEC FRM 3410.1 through SEC FRM 3410.4.

• Content in FSP 25.2 and FSP 25.7 was moved to FSP 25.2A and FSP 25.7A respectively, and content on the application of segment reporting after adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, was added to FSP 25.2 and 25.7. The case study previously in FSP 25.7.10 was moved to FSP 25.8 and updated to reflect the adoption of ASU 2023-07 as well.

• FSP 6.2 was updated to include a summary of recently-issued FASB guidance that affects the statement of cash flows.
• FSP 6.5.2 was updated to clarify guidance on the definition of cash equivalents.
• FSP 6.5.3 was updated to clarify guidance on the presentation and disclosure of amounts generally described as restricted cash or restricted cash equivalents.
• FSP 6.6 was updated to clarify examples of net reporting in the statement of cash flows.
• Information on common cash flow classification issues previously included in FSP 6.9 was moved to FSP 6.8.
• FSP 6.8.2 was updated to clarify guidance when a centralized treasury function is used.
• FSP 6.8.5.4 was updated to clarify guidance on the classification of cash flows associated with derivatives used in net investment hedges.
• FSP 6.8.5.5 now includes guidance on the classification of cash flows associated with settled-to-market contracts.
• Example FSP 6-11 was added to illustrate the cash flow presentation of payments to repay debt with an insignificant coupon; Example FSP 6-12 was added to illustrate the cash flow presentation of payments to repay debt with a bifurcated feature resulting in an insignificant coupon on the debt host. Following examples were renumbered.
• FSP 6.8.8.3 was updated to include guidance on the cash flow presentation of restructuring of a term loan syndication.
• FSP 6.8.12 was updated to clarify guidance on the classification of cash flows related to sold receivables when the reporting entity continues to provide account servicing of sold receivables.
• FSP 6.8.16.1 and 6.8.16.3 were updated to include guidance on the classification of payments for prepaid rent on a finance lease.
• FSP 6.9.20 was updated to clarify guidance on the classification of cash flows arising from business combinations and acquired IPR&D in an asset acquisition.
• Information on supplementary cash flow information is now included in FSP 6.9. Guidance on noncash investing and financing activities previously included in FSP 6.8 is now included in FSP 6.9.2. As a result, subsequent sections have been renumbered. In addition, FSP 6.9.1 now includes discussion of supplemental disclosure of interest and income taxes paid.
• FSP 6.10 was updated to clarify guidance on the presentation of cash and cash equivalents included in assets held for sale in the statement of cash flows.

• FSP 6.9.18 and FSP 6.9.19 were updated to include guidance from LG 9.2.3 and LG 9.3.3.

• Content from LG 9 on presentation and disclosure under ASC 842 (except for LG 9.2.3 and LG 9.3.3) was moved to FSP 14, and content from ASC 840 was removed as ASC 842 is effective for all entities.

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.

PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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• About the Financial statement presentation guide