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profit on sale of non-current asset

This topic has 3 replies, 3 voices, and was last updated 10 years ago by John Moffat.

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July 19, 2014 at 8:18 pm #179177
mp-open
Member
- Topics: 96
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Hallo,
Why profit on sale of non-current asset is deducted from the statement of cash flow from operating activities, they say it is a non-cash income. I don’t understand why when selling an asset and we make a pure profit on sale it is counted as non-cash income, haven’t we received cash actually?
Thank you!
July 20, 2014 at 12:02 pm #179209
John Moffat
Keymaster
- Topics: 57
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Yes we have received cash, but the actual cash received is shown under ‘cash flows from investing activities’.
The profit or loss on the sale is not an actual cash figure.
October 13, 2015 at 12:48 am #276086
Jermaine
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How is it not an actual cash figure ?
October 13, 2015 at 6:27 am #276126
John Moffat
Keymaster
- Topics: 57
- Replies: 54760
If I have a car with a book value of 10,000 and I sell it for 15,000, the the cash figure is 15,000 – that is the cash received. The profit on sale of 5,000 is not the cash figure.
You need to watch the free lectures on Statement of cash flow.
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