Cash and Cash Equivalents
A statement of cash flows explains the change during the period in cash and cash equivalents regardless of whether there are restrictions on their use. The total amounts of cash and cash equivalents at the beginning and end of the period shown in the statement is easily traceable to similarly titled line items or subtotals shown in the Balance Sheet (known as the statement of net position).
Restricted securities held as collateral for securities lending are not included as cash equivalents for the purpose of the statement of cash flows.
Cash includes:
- Cash on hand
- Cash in local banks
- Cash in the state treasury
- Demand deposits with banks or other financial institutions
Cash equivalents are defined as short-term, highly liquid investments that are both:
- Readily convertible to known amounts of cash
- Have an original maturity to the holding agency of three months or less.