This contributed to the diversity in reporting classification of certain common but infrequent cash flows
In efforts to improve financial reporting for NFPs, FASB initially proposed the elimination of the optional indirect presentation method. FASB’s rationale was that the direct method provides more useful information (which is highly debatable) and the indirect method contributes to the underutilization of the statement of cash flows. In addition, through its outreach activities, FASB learned that the direct method first-year implementation costs were primarily in the nature of training and mapping information available from existing systems and did not involve significant costs for new systems or significant ongoing costs or complexities.