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Statement of Cashflow – PPE T-account

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Statement of Cashflow – PPE T-account

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  • September 25, 2021 at 6:35 am #636433
    Avatarty0311
    Participant
    • Topics: 27
    • Replies: 8
    • ☆

    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

    September 25, 2021 at 9:05 am #636449
    AvatarP2-D2
    Keymaster
    • Topics: 4
    • Replies: 7232
    • ☆☆☆☆☆

    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

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