As I prepared for class, i searched for examples and found a number that had done the treatment incorrectly. I saw a lot of the incorrect treatment on the asset side. I emailed Dan Gode who said the same issue applies to the asset side (i.e., no reason why treatment should be different there).

These won't cut and paste very well, but let me try:

HERE’s one where they do the liability side wrong…

MAGMA DESIGN AUTOMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

Fiscal Year Ended
May1, 2011 May 2, 2010 May 3, 2009
Cash flows from operating activities:
Net loss $ (3,262 ) $ (3,334 ) $ (129,242 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation 4,538 6,278 8,633
Amortization of intangible assets 4,166 4,978 28,270
Provision for doubtful accounts (net of recovery) 143 (174 ) 1,124
Amortization of debt discount and debt issuance costs 572 1,976 2,562
Amortization of debt premium (310 ) (240 ) -


HERE are several where they do the asset side wrong…

MAGMA DESIGN AUTOMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

Fiscal Year Ended
May1, 2011 May 2, 2010 May 3, 2009
Cash flows from operating activities:
Net loss $ (3,262 ) $ (3,334 ) $ (129,242 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation 4,538 6,278 8,633
Amortization of intangible assets 4,166 4,978 28,270
Provision for doubtful accounts (net of recovery) 143 (174 ) 1,124
Amortization of debt discount and debt issuance costs 572 1,976 2,562
Amortization of debt premium (310 ) (240 ) -

Greene County Bancorp, Inc. Consolidated Statements of Cash Flows (In thousands)

Years Ended June 30,
2011 2010
Cash flows from operating activities:
Net Income $5,291 $4,885
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 737 922
Deferred income tax (benefit) expense (140) 719
Net amortization of premiums and discounts 1,031 836
Net amortization of deferred loan costs and fees 231 187
Provision for loan losses 1,628 1,273

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PHARMACYCLICS, INC.
Enhanced Coverage Linking

(a development stage enterprise)

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

Year Ended June 30, Period from Inception (April 19, 1991) through June 30,
2011 2010 2009 2011
Cash flows from operating activities:
Net loss $ (35,203 ) $ (15,024 ) $ (23,447 ) $ (413,125 )
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 292 235 299 15,811
Amortization of premium/discount on marketable securities, net 874 421 (32 ) 1,269
Amortization of debt discount - 21 549 570
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TIVO INC.
Enhanced Coverage Linking

CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

Fiscal Year ended January 31,
2011 2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (84,512 ) $ (23,036 ) 104,111
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment and intangibles 9,050 9,160 9,783
Loss on disposal of fixed assets 42 - -
Stock-based compensation expense 25,442 25,354 23,420
Amortization of discounts and premiums on investments 1,768 - -
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OCEAN POWER TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows

Year Ended April 30,
2011 2010 2009
Cash flows from operating activities:
Net loss $ (20,458,824 ) (19,132,008 ) (18,315,150 )
Adjustments to reconcile net loss to net cash used in operating activities:
Foreign exchange loss (gain) 229,415 (540,644 ) 1,295,227
Depreciation and amortization 358,722 365,755 299,405
Loss on disposal of equipment 5,293 113,087 268,976
Treasury note premium amortization 71,236 146,834 288,331
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