How do accounting standards for bank overdrafts differ under U.S. GAAP and IFRS?

 Under U.S. GAAP, firms typically report bank overdrafts as current liabilities on the balance sheet.  Under IFRS, bank overdrafts are permitted to be included in cash and cash equivalents as a reduction if the overdraft balance is part of an integrated cash management strategy.

In addition, compensating balances are minimum cash balances that debtors are required to keep on deposit as support for existing credit agreements that are either part of a contractual agreement or informal. If the balance is held against long-term debt, reclassify the amount of cash held as a noncurrent asset on the balance sheet.

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