FASB ASC 230-10-45-13 treat cash payments related to the equipment separately as both a cash inflow and cash outflow in the statement of cash flows. For instance, ​cash inflow equal to the cash received and a cash outflow equal to the cash paid.

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​The amount reported on the consolidated statement retained earnings as “dividends paid” would include only dividends paid to majority shareholders directly.

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​FASB ASC 810-10-10-1 states:

​"The purpose of consolidated financial statements is to present…the results of operations and financial position of a parent company and all its subsidiaries…as if the consolidated group were a single economic entity."

Just in case you need to know: ​Goodwill = Cash paid - (Fair market value of assets - Liabilities)

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Superficial drill down on long term liabilities sheet four:

• When the bond’s yield requires a discount, the bond’s interest expense is based  on a lower principal and expense applying straight-line would be higher. 
• For a troubled debt restructuring involving only a modification of terms total future cash payments would be compared to the carrying amount of the debt to determine if the debtor should report a gain on restructuring
• A liquidated debt is a debt for an amount to which both parties agree. Payment of a lesser amount does not discharge the balance.
• Effective interest = Carrying value of the bonds × Effective interest rate × Time period
• ​Current liabilities also include long-term obligations that are or will be callable by creditors because the debtor has violated a covenant in the debt agreement. 
• Premium amortization is the difference between the cash payment and the interest expense. The premium amortization is subtracted from the carrying value because the bonds were issued at a premium and will approach face value

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Superficial drill down on long term liabilities sheet three:

• ​For bonds, if sold at a premium, know to take the face value * (1+premium). 
• Bond issued at a discount - first interest expense that is greater than the cash payment made to bondholders.
• Upon the retirement of a bond,  difference between reacquisition price and the carrying amount of the bond is a gain or loss.
• When a bond is retired, the principal, unamortized pre­mium or discount, and bond issue costs that were incurred and recorded as an asset must be written off.
• Term bonds all mature together after a fixed term - serial bonds mature in installments.
• FASB ASC 480-10-25-4 - requires mandatory redeemable stock to be classified as a liability, with proper disclosure.
• Discount resulting from the determination of a note payable's PV should be reported on the balance sheet as a direct reduction from the face amount of the note.
• Effective interest method of amortization is used for bonds issued at a premium - face value of the bonds at the beginning of the period by the contractual interest rate.
• An unconditional redemption feature on stock must be reported as a liability. 
• Covenants are intended to protect the interest of the lending institution.

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Superficial drill down on long term liabilities sheet two: 

• Creditors should recognize property received at the fair value of the property received. 
• ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts.
• Corporations sometimes issue certificates with bonds, known as stock warrants - fair value of warrants on issuance is the fair value * the number of warrants. This amount would increase stockholders’ equity. Total cash received for the bonds with warrants is reflective of the issuance * the premium. The difference of those to amounts will be allocated to the bonds payable account (long-term debt).
• Bond issued for a premium, the issuer receives more than the face amount of the debt upon issuance - therefore, if not amortized, interest expense will be overstated and the equity will be understated (given that net income will be understated).
• To classify a liability as long term, the enterprise must have the intent and ability to refinance the obligation. 
• Term bonds are bonds which are scheduled to be outstanding for a fixed period of time.
• When note payables are exchanged for services, and the interest rate is not stated or not reasonable, note should be recorded at fair value of the services exchanged or at the amount that approximates market value of the note - whichever is more clearly determinable.
• FASB ASC 480-10-25-8 - both embodies an obligation to repurchase the issuer's equity shares, or is indexed to such an obligation AND requires or may require the issuer to settle the obligation by transferring assets.
• FASB ASC 835-30 - does not require any special treatment for notes maturing in less than one year. 
• The face amount of a note less the discount is the initial proceeds or the initial carrying value of the note.

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Superficial Drill Down on Long Term Liabilities Sheet one: 

• The carrying amount or book value is the net amount at which an item is reported in the financial statements of the enterprise. ​FASB ASC 470-60-35-2 requires that a debtor in a troubled debt restructuring recognize a gain measure as “the excess of (i) the carrying amount of the payable settled…over (ii) the fair value of the assets transferred to the creditor.”
• Serial bonds mature in installments - part of the total principal is paid back each year
• Debenture bonds are unsecured debt
• Bonds issued at a discount - must amortize the discount up to the balance sheet date. 
• ​Market price of a bond issued at a discount is equal to the present value of its principal amount plus the present value of all future interest payments - at the market rate; market price of a bond issued at a premium is equal to the present value of its principal amount and the present value of all future interest payments, at the market interest rate.
• Interest paid on the face amount vs. the interest expense is  multiplied by the carrying amount. The difference of these amounts will be the discount amortization added to the carrying amount of the bonds.
• When a company is obligated to pay a specified, even if it does not take delivery of the contracted goods, there exists an unconditional purchase commitment - not reported on the balance sheet, but disclosed in notes. 
• Interest must be recognized as it is accrued, not when it is paid.

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​Superficial Drill Down on Governmental Accounting Sheet Nine: 
​

• GASB 1400.109–.111 - held for public exhibition and not gain, it is to be protected and preserved, and a policy is in place requiring proceeds from any potential sale to be used to acquire other collection items. 
• GASB 1600.127.b - “Expenditures for insurance and similar services (prepaid items) extending over more than one accounting period need not be allocated between or among accounting periods, but may be accounted for as expenditures of the period of acquisition.”
• The general fund records expenditures rather than expenses - record salaries and wages must,  to expenditures control as an example. 
• Revenues from state appropriations for other than capital-asset-related purposes are recorded as nonoperating revenues.
• Debt service fund is a reserve used to account for and report payments of the maturing principal and interest of general government short- and long-term debt.
• Encumbrances resulting from the issuance of purchase orders or approval of contracts are not reported as liabilities since neither the goods nor services have been received.
• A liability is recorded on the books only when the goods/services are received. 
• The intent of balanced budget laws is to achieve interperiod equity

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​Superficial Drill Down on Governmental Accounting Sheet Eight: 

• A statement of cash flows should be presented for proprietary funds only.
• ​Encumbrance entries are recorded in budgetary accounts to prevent overspending of appropriations and to assure compliance with budget authorizations. 
• For an imposed nonexchange form of tax, assets are recognized in the period when a legal claim has arisen, or when resources are received, whichever occurs first.
• GASB Statement 84 requires additions to be disaggregated and shown by source. Deductions must be disaggregated and shown by type.
• Except for qualifying infrastructure capital assets, governments are required to depreciate all capital assets with limited lives.
• Equipment, facilities, services, and final cover, included in the estimated total current cost, should be reported as a reduction of the accrued liability.
• Derived tax revenues result from taxes assessed on exchange transactions. 
• FASB has jurisdiction over entities with exemption to federal taxation.
• Inflows of assets from other funds without a requirement for repayment are considered interfund transfers.
• The letter of transmittal and the statistical section required for a CAFR and GFOA's certificate are neither basic statements nor required supplemental information.
• The government-wide financial statements consist of a statement of net position and a statement of activities.
• GASB 2200.110 “report information about the overall government without displaying individual funds or fund types”.

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Superficial Drill Down on Governmental Accounting Sheet Seven: 

• The enterprise fund uses the economic resources measurement focus and the accrual basis of accounting. 
• Fund accounting is used by governmental units with financial resources - which are segregated for the purpose of carrying on specific activities or attaining certain objectives.
• A governmental entity should have only one general fund. 
• Recording error should be signaled if balance in the Fund Balance—Reserved for Encumbrances account exceeds the amount of encumbrances. 
• Capital projects uses he same basis of accounting as the special revenue fund. A capital projects fund is a fund used to account for financial resources to be used for the acquisition or construction of major capital facilities or long-lived assets 
• In relation to pension and other postemployment benefits - GASB Statement 84 requires additions to be disaggregated and shown by source. Deductions must be disaggregated and shown by type.
• Permanent fund - principal amount of the fund is restricted in use and only the earnings can be expended.
• Special revenue fund - fund’s principal and earnings are both restricted to use.
• Governmental accounting is only required to have one fund, the general fund. Other funds can be added to meet budgetary and legal requirements.

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Superficial Drill Down on Governmental Accounting Sheet Six: 

• Often times, in encumbrance accounting, credit appropriations control to record budgeted appropriations 
• Outstanding encumbrance would be reflected as either committed or assigned fund balance
• Fund balance in excess of the amount of the encumbrance would be considered assigned by being accounted for in a separate governmental fund (i.e. capital project fund).
• GASB 1400.107, footnote 9 - a change from depreciation to the modified approach should be reported as a change in an accounting estimate, and this change would not require a restatement of prior periods.
• Fund accounting segregates resources according to the purpose(s) for which they may be used. Budgetary accounting maintains a record of the remaining appropriation authority available for specific purposes at any point in time. 
• Interfund receivables and payables should be - reported as amounts due to and due from other funds.
• Enterprise funds are used to report any activities for which a fee is charged.
• The general fund is the primary governmental fund, used to account for all financial resources not required to be accounted for in another fund.
• Internal service funds are proprietary funds used to account for any activity that provides goods or services to another fund, department, or agency of the primary government and its component units or to another government on a cost-reimbursement basis.
• Special revenue funds are governmental funds used to account for proceeds of specific revenue sources legally restricted to expenditure for specific purposes. 
• Proprietary fund financial statements include statement of net position; statement of revenues, expenses, and changes in net position; and statement of cash flows. 
• Property taxes are considered an “imposed nonexchange revenue.”
• The comprehensive annual financial report (CAFR) has a template specified by the GASB - letter of transmittal is specified as part of the introduction section. 

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Superficial Drill Down on Governmental Accounting Sheet Five: 
​

• General fund records expenditures rather than expenses -  entry to record the salaries and wages must, therefore, be made to expenditures control. 
• All taxes of the reporting government, even if restricted to a specific program, are general revenues.
• Entities having status as bodies corporate and politic and entities with the power to enact and enforce a tax levy are each considered governmental organizations
• Letter transmittal and the statistical 
• The portion of fund balance that reflects equity for amounts that cannot be spent because they are not in spendable form would be termed “non-spendable.”
• Debit encumbrances control - record the transaction of approved purchase orders issued for supplies
• Credit reserve for encumbrances - credit when it issues a purchase order for supplies.
• Equipment with a useful life of more than a year, correct treatment includes capitalizing (depreciation is required). 
• The internal service fund, a proprietary fund, records depreciation.
• A comprehensive annual financial report (CAFR) includes an introductory section, financial section, and statistical section.
• If a government’s "Other Post-employment Benefit" plan is administered through a trust that meets specified criteria in GASB Statement 75, the net OPEB liability will be reported. If not the total OPEB liability will be used. 
• Neither general funds nor fiduciary funds have the income determination orientation. 
• A component unit should be included in the reporting entity or primary government's financial statements using the blending method if
  • Component unit's governing body is the same as the primary government; 
  • Component unit provides services entirely or almost entirely to the primary government;
  • Component unit's debt is expected to be repaid with resources provided by the primary government

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Superficial Drill Down on Governmental Accounting Sheet Four: 

• Modified accrual financial statements recognize pension expenditures primarily based upon a funding approach.
• In a year of the donation, a recipient government should recognize a revenue as well as an expense in the same amount.
• Public institutions reporting as special-purpose governments should report the estimated historical cost for major general infrastructure assets.
• FASB has jurisdiction over entities that are exempt from federal taxation.
• Current financial resources is the measurement focus of governmental fund accounting.
• ​Extraordinary and special items are defined as unusual and infrequent in nature; special items are significant transactions under management's control.
• Understandability and relevance will be subject to the user's own interpretation.
• GASB has prescribed that fines and forfeitures are included in charges for services.
• Bond anticipation notes are included as general long-term liabilities - amount would never be revenue as the amount is due to be repaid at some point.
• General government operation would be recorded in a governmental fund.
• Income determination - orientation of accounting and reporting for all proprietary funds of governmental units.
• Fiduciary funds (the pension fund) are not reported in the government-wide statements.
• Net position of internal service funds are reported with governmental activities in government-wide statement. ​

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Superficial Drill Down on Governmental Accounting Sheet Three: 

• GASB C60.107 - government's compensated absences liability normally should be calculated based on the salary rates in effect at the balance sheet date.
• Enterprise funds are a proprietary fund and investment and pension trust funds are fiduciary funds. They use the accrual basis of accounting.
• Special revenue, the general fund, capital projects funds, debt service funds and permanent funds are governmental and use the modified accrual basis of accounting. 
• GASB 1800.128 - when a capital lease represents the acquisition or construction of a general fixed asset... should be reflected as an expenditure and  other financing source.
• “Estimated Revenues” would consist only of those financial resource inflows expected to be recorded as revenues. The property taxes, licenses, and fines would be recorded as revenues.
• Interest on debt reported should be reported as the interest from the notes payable benefiting specific functions as a direct expense of those functions and report the remaining interest as a separate line as an indirect expense.
• Noncurrent portion of leases financed by the general government is reported as general long-term liability. General long-term liabilities should be reported in the governmental activities column.
• Fund - composed of a self-balancing set of accounts; Fund financial statements is a minimum required report. 
• GASB 1400.105 - certain infrastructure capital assets are not required to be depreciated under the modified approach. 
• GASB 2200.211 - Narrative explanations of combining and individual fund statements should be presented on divider pages, directly on the statements and schedules, or in a separate section.

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Superficial Drill Down on Governmental Accounting Sheet Two: 
​

• ​Enterprise fund receiving interest on long-term investments - Investing activities
• Encumbrances outstanding at year end most likely will represent budgetary control for the general fund. 
• Non-major funds should be aggregated (not individually) in a separate column. 
• Normally a governmental organization if the controlling majority of the members (of the governing board) are appointed by state government officials. 
• Remaining fund balances, that show a deficit amount would be labeled unassigned. 
• If determining the actual historical cost of general infrastructure assets is not practical because of inadequate records then estimated historical cost. 
• Primary characteristics of governmental structures includes representative form of government and the separation of powers, the federal system of government and the prevalence of intergovernmental revenues, and the relationship of taxpayers to services received. 
• Governmental activities portion of the government-wide statement of net position, recs should tie with the fund balances of all governmental and internal service funds (that provide service to governmental functions).
• Grants from state government is an example of revenues where proceed from general obligations and/or transfers from inter-fund transfers would be other financing sources. 
• Property taxes, licenses and permits, and intergovernmental revenues will all be represented in the budget - estimated revenues.
• Cash receipts from grants and subsidies to decrease operating deficits - Non-capital financing. 
• Permanent fund (governmental fund–type) used when resources are restricted such that principal must be maintained indefinitely but earnings may be used to support the reporting government's own programs.
• Credit tax anticipation notes payable - secured by a taxing power, municipality that uses modified accrual and encumbrance accounting to record  short-term financing received from a bank
• GASB 2200.211 - Narrative explanations of combining individual fund statements should be presented on divider pages, on the statements and schedules, or in a separate section. 
• The government-wide financial statements consist of a statement of net position and a statement of activities.

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Superficial Drill Down on Governmental Accounting Sheet One: 

• For governmental fund types, primary measurement focus includes flows and balances of financial resources.
• Given that accounting is done on the accrual basis, recognition will most likely recognize the liability when the underlying transaction takes place. 
• If an item is "inexhaustible" (like artwork), governments may capitalize, but is not required (and neither is depreciation). 
• Interest on debt - reported from the interest from the notes payable benefiting the specific function as a direct expense, and then the remaining interest as a separate line item via indirect expense. 
• Of the upmost importance and objective of financial reporting by state and local governments is accountability. 
• Services from one governmental unit to another governmental unit is recognized as operating revenues. 
• Funds that use the economic resources measurement focus and accrual basis is both Fiduciary and Proprietary funds. 
• Collections o expected to be collectible during the first 60 days of the following year can be recorded as revenues of the current year (if to be used to pay current liabilities of the current year). 
• A component unit should be included in the reporting entity or primary government's financial statements using the blending method if the same as the primary government. 
• Enterprise funds - used to report activities for which a fee is charged and to cover a material need (covered by the fees). 
• Fund balance-committed will include initial outstanding encumbrances. After completing all encumbrance steps, any outstanding fund balances will be Fund balance-assigned, which will be the difference of the outstanding fund balance minus the fund balance-committed. 
• Special-purpose unit of government is considered a primary government if: separately elected governing body, legally separate, and fiscally independent of other state/local governments. ​
• Debit expenditures control, under modified accrual and encumbrance accounting, the transaction of the receipt of supplies from approved POs and related invoice. 

The following post is intended to use this as a platform to discuss high level points and notes on PP&E:

• A non-monetary exchange is generally measured based on the fair market value.  When the transaction lacks commercial substance the exchange should be measured based on the reported amount of the non-monetary asset surrendered.
• Having determined the division is the lowest level of identifiable cash flows,  in performing impairment tests, one may perform a recoverability test on the carrying amount of the division's assets.
• Donating land as an incentive for building a factory, the nonmonetary transaction should be accounted via APIC (additional paid-in capital). 
• Impairment testing for tangible assets is a two-step process - specifically, with the first step of the process, if undiscounted cash flows are greater than the carrying amounts of the asset, then there is no need for the asset to be impaired. 
• The capitalized interest is based on the payments made for the land and progress payments to the contractor based on the amount of the year that these payments were outstanding - sum/total of total weighted-average expenditures.
• A gain may be determined by the proportion of cash received to the total consideration.
• Proper accounting for losses when nonmonetary assets are exchanged for other nonmonetary assets - A loss is recognized immediately, assets received should not be valued at more than their cash equivalent price.
•  IFRS will allow the restoration of an impairment loss, but U.S. GAAP will not allow the restoration.
• Cash received is taken into consideration in determining the fair value of the equipment surrendered, but not taken into consideration in determining the fair value of the equipment received.
• The total costs to be depleted include both the cost of the land + the cost to restore the land. The total cost minus the land value after restoration is the depletable basis. The depletable base over the resource will be the per unit depletion per resource.  
• The cost of plant assets includes all expenditures necessary to acquire the asset and prepare it for its intended use. The cost of land includes purchase price, acquisitions based fees (legal, commissions, title insurance), and the costs of preparing the land for use (surveying, grading, filling, draining, and clearing). The cost of tearing down an existing building is included in the cost of the land.
• FASB ASC 835-20-25-5 provides: "The capitalization period shall end when the asset is substantially complete and ready for its intended use."
• If actual interest cost incurred is greater than the avoidable interest, the amount of interest that can be capitalized is avoidable interest. 
• When a rearrangement adds to the overall efficiency of the production process for equipment - should be capitalized into the cost of the asset.
• With a higher book value, a sale at a loss would be a higher, and a sale at a gain would be a lower gain. For instance, if you sell a property at 50 under one depreciation method book value of 40, gain is 10. Where if the book value is 35, gain is 15. So, gains decrease with higher book value. If you sell a property at 30, using the same book value, you have a loss of 20 vs. 5, therefore, losses are increased. 

The following are some Plant, Property, and Equipment (PP&E) footnote essentials: 

• Interest should be capitalized as a part of the historical cost of the asset - assets that are for an enterprise’s own use.
• ​The cost of improvements extending the useful life of PP&E are capitalized when incurred by debiting the asset account.
• All repair and maintenance costs that do not enhance the service potential are expensed. 
• Annual amortization expense for a leasehold improvement is the cost of the improvement divided by the shorter of the useful life or the lease term.
• Land Held for Future Development should be classified as a Long-Term Investment. Land that is currently being used for operations is classified as Land. 
• Assets donated to a for-profit entity are recorded at fair market value.
• Biological assets are reflected on financial statements prepared under IFRS, not under GAAP.

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The following are some scenarios in which you may need to appropriately debit or credit adjustments for an "Adjusted Trial Balance":
​

• Interest income on notes receivables may have been earned but not received, therefore the income is accrued. Under this scenario, Dr. Interest Receivable and Cr. Interest Income. 
• A/R can call for a change if a consumer becomes bankrupt, and the balance is then written off. Therefore, Dr. Allowance for Doubtful Accounts and Cr. A/R. 
• Allowance for doubtful accounts can arise when there is a need to record a bad debt expense. Therefore, Dr. Bad Debt Expense and Cr. Allowance for Doubtful Accounts
• Prepaid Expenses can have a change when insurance premiums expire, therefore they need to be expensed. Therefore, Dr. Insurance Expense and Cr. Prepaid Expense. Also, prepaid expense can arise from rent payments and may cause the need to reclassify if not properly recorded at first, therefore, if you prepay in advance you Dr. Prepaid Expense and Cr. Rent Expense. 
• Accumulated Depreciation - often times there are depreciation adjustments needed, therefore, here the idea is to DR. Depreciation expense and Cr. Accumulated Depreciation. 
• Income Tax Payable - Income tax estimates arises, therefore if any expenses need to be accrued to do so, Dr. Income Tax Expense and Cr. Income Tax Payable. 
• Rent Expense - For rent expense that is reclassified, Dr. Prepaid Expense and Cr. Rent Expense.

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There are many different ways to discuss the Multi-Step Income Statement, especially in the context of when you are completing Annual Report. This is just one of the ways, and hopefully, it helps you understand some of the dynamics better. 

Sales
(-) Sales Discounts
(-) Sales Allowances
= Net Sales
(-) COGS
= Gross Profit 
OPEX
(-) Depreciation
(-) Supplies, Repairs, Advertising, Freight, Utilities
= Income from Continuing Operations
Other Gains and Losses
(-) Loss on Sale
(+) Gains
= Income from Continuing Operations Before Income Tax
(-) Income Taxes
= Income Before Discontinued Operations
(-) Discontinued Operations
(+) Income Tax Benefits
= Net Income
EPS

Some quick notes:

• COGS  = Cost Available for Sale (CGAS) - Ending Inventory
• Depreciation expense can often be found by taking the change in the accumulated depreciation account
• Dividends are a reduction from retained earnings, and therefore, not considered an expense. 
• Loss on sale can arise from cash proceeds being less than the book value
• Gains can result from the difference between cost of repairs vs. potential insurance proceeds
• Income taxes can be deduced via the income tax rate
• EPS is Net Income divided by the total number of shares. For instance, you can find the common stock and divide that by the par yield (just an example). 

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Consolidations happen in the real world and therefore, there is accounting required to apply for it. The following is an example, one of many in the world, on how to work through a consolidation:
 
Company A pays 38 for Company B, which has a book value of 33. Therefore, it is important to eliminate the subsidiary accounts (investment and equity). Differential will be the plug of the difference.

• Dr. Owner’s Equity (Common Stock and Additional Paid in Capital APIC) – 33
• Dr. Differential – 5
• Cr. Investment in Company B – 38

 
Company B’s fair value was 33, plus write-ups for inventory. Company A paid 38 generating goodwill. Assuming the write up was valued at 1, goodwill then will be at 4.

• Dr. Goodwill 4
• Dr. Inventory 1
• Cr. Differential 5

 
Intercompany sale of equipment requires to be eliminated and depreciation expense will be recalculated. Between company’s B’s credit and A’s debit, it resulted in a net debt of 3.3. Company B eliminates depreciation of 4.2, which results in a post sale depreciation expense for Company A of .15, therefore, requiring Company B to eliminate the gain on sale of .9.

• Dr. Equipment 3.3
• Dr. Depreciation (X) .15
• Dr. Gain on Sale .9
• Cr. Accumulated Depreciation 43.5

 
Intercompany sales, COGS, and profit MUST be eliminated. If sales were 6, and profits were 2.4, and the ending inventory was .48, then COGS is plugged and the difference.

• Dr. Sales 6
• Cr. COGS 5.2
• Cr. Inventory .48

 
Eliminating intercompany AP and AR can be done via (assume .6 value)

• Dr. AP .6
• Cr. AR .6

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Quick shoutouts to CR, ATO, DR, ROA, ROE, P/E, TIE, BV/Share, and Payout:

• ​The Current Ratio is computed by dividing current assets by current liabilities. So, CR = CA/CL.
• Asset turnover is computed by dividing sales by average assets. So, ATO = Sales/Avg. A.
• Debt ratio is computed by dividing liabilities by assets. So, DR = L/A.
• Return on Assets is computed by dividing Net Income by average assets. So,  ROA = NI/Avg. A.
• Return on Equity is computed by dividing Net Income by average equity. So, ROE = NI/Avg. E.
• The price-earnings ratio is computed by dividing the market price per common share by earnings per share. Earnings per share is calculated by (net income minus preferred dividends) divided by average common shares. So, PE = Price/EPS; EPS = (NI-Pdiv)/ Avg. Common Shares.
• Times interested earned is computed by dividing income before interest expense and taxes by interest expense. So, TIE = EBIT/Interest X.
• Book Value per common share is computed by dividing common stockholder equity by the common shares outstanding. So, BV/ share = Equity/# of common shares.
• Payout ratio to shareholders is computed by dividing common dividends by (net income – preferred dividends). So, Payout = Div / (NI – Pdiv). 

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Some shoutouts to FASB ASC 230-10-45 said only a few ever: 

• ​FASB ASC 230-10-45-16 helps explain the minimum categories that must be included in reporting cash inflows from operating activities.
• FASB ASC 230-10-45-3 helps address presentation of cash flow per-share data in the financial statements.
• FASB ASC 260-10-45-7 helps provide presentation guidance (authoritative) for both basic and diluted EPS. 

Statement of CFs using the indirect method begins with net income. Therefore, an example of this conversion can be: 

CF from OPERATING Activities:
Net Income
(+) Cash Dividends received
Add or deduct items not affecting cash: 
(+) Depreciation
(-) Equity in net income
(+) Impairment
(+/-) Increase/Decrease in AR
(-/+) Increase/Decrease in AP
Net Cash Operating Activities

CF from INVESTING Activities: 
(-) Purchase of PP&E

CF from FINANCING Activities: 
(+) Capital Investments (could be the cash payment for admittance)
(-) Partner's Drawings
(-) Possible reduction of payables (i.e. mortgage)

Net increase/decrease in Cash
Cash beginning of the year
Cash end of year
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Some are examples of categories in cash flow reporting:

• Dividends received from investments – Operating
• Proceeds from investment securities (more than one year) – Investing
• Cash paid for G&A – Operating
• Purchase of treasury stock – Financing
• Issuance of long-term debt – Financing
• Issuance of common stock to purchase land – Supplemental disclosures
• Unrestricted year 1 promises collected – Operating
• Cash from contributor as good faith to contribute matching funds – Operating
• Bus, land, or equipment purchase – Investing
• Debt security endowment restricted – Financing
• Principal payment on short-term bank loans – Financing
• The interest payments are - Operating
• Purchase of equity securities (more than a year) – Investing
• Dividend income earned on securities – Operating
• Interest earned on endowment - Operating

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For a statement of retained earnings:

• If running at a loss, then “Less: Net loss”
• Cash dividends are a distribution of net income to the owners of the corporation, not an expense. 
• If purchasing treasury stock, then “Less Purchase of treasury stock”
• Property dividends are an alternative to cash or stock dividends and reduce retained earnings by the fair market value upon declaration.
• A change in accounting estimate is not considered a prior-period adjustment, and is handled on a prospective basis only. To not be shown on the Statement of Retained Earnings.
  

 
Therefore an example of a statement of retained earnings can have the following dynamics: (Minus) Net Income -> (Minus) cash dividends on preferred stock -> (Minus) Purchase of treasury stock -> Minus declaration of property dividend (at FMV)

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