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Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › effect of overdraft disposal on cash flow
Hi,
Could you please help me understand the following cash flow related issue?
The followings are parts of the answer of example “Weston”.
“Proceeds on disposal of Northern (W2) $87.4”
“The net cash impact of the disposal is therefore $87.4 million ($85.4m
proceeds + $2m overdraft disposed”
How can the disposed overdraft be an addition of the actual cash proceeds on disposal?
Or is it only deemed to be part of the proceeds because it is actually cash inflow that we never pay back to the bank by disposing the liability? I am trying to imagine it in practice but I am really struggling.
Many thanks