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Nikitagarwal
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In cash flow – PPE account – if there is a total balnce of PPE is 14m and in which 3m is being sold for 1.8m then we just have to deduct 3m from the total and not account for any sale proceeds ? or profit/loss? why ?
P2-D2
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The proceeds are a cash in flow of $1.8 million
The carrying amount of $3 million is removed from PPE (T-account)
The loss on disposal is adjusted through the profit from operation reconciliation in operating activities
Thanks
Nikitagarwal
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