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statementofassets,liabilities,andnetassetscouldreporttotalnetassetsorfundbalances,arelated
statementofactivitiescouldreportchangesinthosetotals,andanotetothefinancialstatementscould
provideinformation,usingestimatedoractualamountsorpercentages,abouttherestrictionsonthose
amountsandon
anydeferredrestrictedamounts,describethemajorrestrictions,andprovideinfor‐
mationaboutsignificantchangesinrestrictedamounts.
Forfinancialstatementspreparedwhenapplyingthecash‐ortax‐basisofaccounting,GAAPdisclosurerequire‐
mentsthatarenotrelevanttothemeasurementoftheitemneednotbeconsidered.To
illustrate,
fairvaluedisclosuresforinvestmentsindebtandequitysecuritieswouldnotberelevantwhenthebasis
ofpresentationdoesnotadjustthecostofsuchsecuritiestotheirfairvalue.
disclosuresrelatedtoactuarialcalculationsforcontributionstodefinedbenefitplanswouldnotberele‐
vantin
financialstatementspreparedwhenapplyingthecash‐ortax‐basisofaccounting.
disclosuresrelatedtotheuseofestimateswouldnotberelevantinapresentationthathasnoesti‐
mates,suchasthecash‐ormodifiedcash‐basisofaccounting.
Financialstatementspreparedwhenapplyingthecash‐basis
ofaccountinggenerallydonotincludeastatement
ofcashflows.However,dependingontheuser’srequirements,financialstatementspreparedwhenapplyinga
modifiedcash‐orthetax‐basisofaccountingmayincludeastatementofcashflows.Forexample,itmaybe
challengingforuserstoobtainaccurateinformationon
operating,investing,andfinancingactivitiesinsingle‐
yearfinancialstatementspreparedwhenapplyingthetax‐basisofaccounting unlessastatementofcashflowsis
presented.
SimilartofinancialstatementspreparedinaccordancewithGAAP,inordertoachievefairpresentation,financial
statementspreparedwhenapplyingthecash‐ortax‐
basisofaccountingshouldincludeallinformativedisclo‐
suresthatareappropriatefortheapplicablefinancialreportingframework,includingallsignificantmattersthat
materiallyaffectthefinancialstatements’use,understanding,andinterpretation.
Additionally,becausefinancialstatementspreparedwhenapplyingthecash‐ortax‐basisofaccountinghave
certaininherentpresentationand
disclosurelimitations,inordertoenhancethevalueandusefulnessofsuchfi‐
nancialstatements,thepreparermaydiscloseadditionalinformationinthenotestothefinancialstatements.
Forexample,donatedcapitalassetswouldnotbeincluded inthebalancesheetequivalentinfinancialstate‐
mentspreparedwhenapplyinga
modifiedcash‐basisofaccounting—evenifthemodificationtothecash‐basis
ofaccountingistorecordcapitalexpendituresasassetsanddepreciatethemovertheirestimatedusefullives.
Thepreparermayelecttodisclosethevalueofsuchdonatedcapitalassetsinthenotestothefinancialstate‐
ments.
Pr esen t a tion— Cash‐BasisFinancialStat ements
Becauseabalancesheetequivalentwouldsimplyshowthecashbalance andacorrespondingequityaccount,
andastatementofcashflowswouldberepetitiveofthestatementofcashreceiptsanddisbursements,finan‐
cialstatementspreparedwhenapplyingthecash‐basisofaccountingmayconsistonlyofastatementof
cashre‐
ceiptsanddisbursements.Althoughasinglestatementmaybepresented,info rmativedisclosures arestillnec‐
essary.Additionally,restrictionsoncashbalancesshouldeitherbepresentedonthefaceofthestatementof
cashreceiptsanddisbursementsorshouldbedisclosedinthenotestothefinancialstatements.