FRA ( Cash Flow statement Question)

In calculating the CFI, The sale proceeds of the asset is computed using the net book value which deducts the accumlated depreciaton.

While in Scheweser notes, it says that the gross value of the asset is used and depreciation is ignored as it’s a non- cash item.

Would someone please clarify the scheweser point, maybe i got it the wrong way.

Thanks :slight_smile:

The ‘cash’ that comes in equals the amount you sold the asset for. Contributes to CFI. I think you have understood it wrong.

Cash flow Statements are all about inflows and outflows of cash. So the whole inflow is recorded.

and the proceeds of the sale and gain and loss and depreciation appears on income statement (not CFI). this is Cash flow from investment all other things doesnt show up here.

CFI only contains the cash in flow and out flow from investment. The gains and other stuff is not reported here. In fact they are adjusted in the calculation of CFO when gains are part of NI and indirect method is used. But here in CFI the sale proceeds are recorded as inflow irrespective of gain or loss and investments are recorded as outflows.