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Hello
Could you please help me to undestand why the PROFIT ON SALE is added in the indirect method and decucted in the direct method?
Thanks
GabbiProfit on sale is not added in the indirect method.
In the indirect method, when calculating the cash flow from operating activities, we start with the profit and adjust it to get a ‘cash profit’. Any profit on sale of a non-current asset will have been included in the profit, but is not a cash flow, and therefore it is deducted from the profit to get the cash flow.
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