CFA Level I · CFA Level I Exam · Analysis of Long-Term Assets
In the statement of cash flows under IFRS, the cash received from selling a long-term asset is most likely reported as:
Cash received from selling a long-term asset is an investing cash inflow. The gain included in net income is removed in the operating section under the indirect method, so the full proceeds appear only in investing activities.
- Aan investing cash inflowCorrect
- Ba financing cash inflow
- Can operating cash inflow adjusted for the gain
Explanation
Proceeds from disposal of long-term assets are investing inflows. In an indirect operating cash flow, the gain is subtracted from net income so it is not double counted.
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