Ask your own question, for FREE!
Finance 13 Online
OpenStudy (anonymous):

What's the difference between the depreciation on the income statement and the depreciation on the cash flow statement?

OpenStudy (anonymous):

depreciation on the income statement is counted as a notional expense, hence making a business' profit seem lower, which is not actually true as depreciation cannot be quantified. this enables the business to pay less taxes. in a cash flow statement, depreciation is put under cash outflows, hence reducing the monthly or yearly closing balance of the business.

OpenStudy (anonymous):

Basicaly the depreciation in the income statement should be same as the one in the cash flow. In the income statement the depreciation (actually amortization to be more precise) represents a part of the assets' value recognised as cost of period - in other words, the cash-out for an asset's aquisition is not an expense at the moment you buy it, it becomes an expense gradually during its life time. In the cash flow (indirect method), the depreciation is added (appears with +) because it is not an actual cash-out.

Can't find your answer? Make a FREE account and ask your own questions, OR help others and earn volunteer hours!

Join our real-time social learning platform and learn together with your friends!
Latest Questions
kingsston: is heading south by Zach Bryan a good country song?
59 minutes ago 3 Replies 1 Medal
MakaylaChuck23: I need tips on how to expand my English vocabulary
7 hours ago 8 Replies 1 Medal
jinxthelovely: does my essay look good ( its due at 12 tn )
9 hours ago 6 Replies 5 Medals
Stahl2025: Anyone wanna collab?
13 hours ago 20 Replies 2 Medals
danielfootball123: How do I create emojis on Questioncove?
12 hours ago 10 Replies 0 Medals
Can't find your answer? Make a FREE account and ask your own questions, OR help others and earn volunteer hours!

Join our real-time social learning platform and learn together with your friends!