Dear All: I know that when you capitalize instead of expense, CFO is higher and CFF is lower. But, shouldn’t CFI be lower because capitalizing PP&E, for example, turns interest expense into CFI by capitalizing, so CFO increases and CFI decreases. Does the “CFF decreases, CFO increases” thing only hold for premium/discount bonds, leases, etc, or does it also hold for capitalization of assets? -Richard
CFI is lower. CFF is not affected in the case of costs and int., it’s affected with bonds.