Q: Do banks use FASB 95 CF or only UCA?
A: It varies by financial institution. All credible software spreading systems produce the UCA cash flow report, so if a lender uses accrual financial statements as its source documents for analysis, it is likely to use the UCA cash flow report.
The FASB 95 statement of cash flows is always included in the set of accrual financial statements, but it is not designed to answer the four essential issues addressed by the UCA cash flow statement – the borrowing causes, the cash sources of debt service, the financing requirement, and the cash sources used to meet the financing requirement.
Rather, the FASB 95 statement of cash flows reflects the accounting profession's decisions about format and account classification that generally conform to GAAP guidelines.
Course overiview: Description and Analysis in the Credit Write-Up