FCInv = Capital expenditures - Proceeds from sales of long-term assets
FCInv = Ending Net PPE - Beginning Net PPE + Depreciation - Gain on Sale
The second formula is equating ‘Gain on Sale’ with ‘Proceeds from sales of long-term assets’.
However, won’t the two differ in a lot of cases? If I sell an asset with a book value of $100, for a price of $120, my proceeds should be $120, but my gain on sales should be $20.
Schweser makes this statement, ‘If sales proceeds are not given directly, find gain on asset sales from the income statement.’
I find this a bit illogical. Gains on asset sales COULD equal proceeds, but that does not have to be the case