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Cash flow statement

25 May 2011

profit from sale of asset treated as investing activivity correct or not (i think only amount realised from sale of asset is investing activity

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5 Replies

PRATEEK PATEL (Student [I.C.A.I]) (993 Points)
Replied 25 May 2011

Amount realised from sale of asset is already include whole figure, which should be treated as CASH FROM INVESTMENT ACTIVITY.

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Ankit Madhogarhia (Pursuing Final) (531 Points)
Replied 25 May 2011

cash recieved on sala of investment should be shown as a investment activity ,& if u your doin the CFS by indirect method then profit should be added back to arrive to net profit Before alla adjustment.

(Guest)

Net amount realised form sale of investment should be considered in cash from investment activity.

Under Indirect method profit or loss on sale should be adjusted in cash from operating activities as below

If profit on sale of asset then amount attributable to profit should be reduced from operating activity

if loss on sale of asset then such amount should be added back.....

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BHAGIRATHI SAMAL (Article Assistant) (33 Points)
Replied 25 May 2011

not only profit on sale of asset but total amount of asset realised is treated as investing activity & the profit on sale of asset is deducted from the profit if that given in the P&L A/C.