Statement of Cashflow - PPE T-account

TTim4y ago

Hi Chris, I was just going through you lecture on the intro to Statement of Cash Flow (Chapter 4). To check that I have the correct understanding, the PPE disposal value that appears on the credit side to the PPE account is the same value as the 'Proceeds' within the calculation "Profit/Loss on Disposal = 'Proceeds' - Carrying value' Is this correct? Thanks and Regards, Tim

PP2-D2Tutor4y ago#1

Hi Tim, Yes, that would be correct. We remove the carrying value from the T-account (the credit entry), the proceeds are shown as a cash inflow and the profit/loss on disposal is adjusted as a non-cash item in the operating profit reconciliation. Thanks