Since the establishment of FASB statement No. 95- statement of cash flows, there has been numerous amendments to update some diversity in the cash flow statement. The reason for the diversity in the statement of cash flow is the lack and ambiguity of accounting guidance within FASB statement No. 95. The problem with the ambiguity in the guidelines is that businesses were presenting the statement of cash flows in various way that were not the same as other business. One of the terms that created the ambiguity was the word “funds”, which was not to descriptive like other words such as cash or cash equivalent. The new standard removed the reconciling to changes in working capital and added how to focus on cash receipt and cash payment transaction
