I am trying to support that borrowing on a revolving line of credit would be considered a financing activity in the statement of cash flows based of ASC 230-10. However, this is what the ASC lists:
Cash Flows from Financing Activities
45-14 All of the following are cash inflows from financing activities:
a. Proceeds from issuing equity instruments
b. Proceeds from issuing bonds, mortgages, notes, and from other short- or long-term borrowing
c. Receipts from contributions and investment income that by donor stipulation are restricted for the purposes of acquiring, constructing, or improving property, plant, equipment, or other long-lived assets or establishing or increasing a permanent endowment or term endowment
d. Proceeds received from derivative instruments that include financing elements at inception, whether the proceeds were received at inception or over the term of the derivative instrument, other than a financing element inherently included in an at-the-market derivative instrument with no prepayments
e. Cash retained as a result of the tax deductibility of increases in the value of equity instruments issued under share-based payment arrangements that are not included in the cost of goods or services that is recognizable for financial reporting purposes. For this purpose, excess tax benefits shall be determined on an individual award (or portion thereof) basis.
So what does a revolving line of credit fall under in this context? Thank you!
Read more: Is a revolving line of credit considered a derivative instrument?
