Question

when preparing a cash flow statement do we have to add any gain/loss from the disposal of an asset to the depreciation charge for the year?

Answer 1

Yes

Answer 2

Not the gain or loss but the entire proceeds since it is a cash flow statement.

Answer 3

gain/loss would be recorded in Income Statement, with cash flow should only reflect the and inflow in the investing activities, in this case an asset being sold, assuming it's a fixed asset. the gain/loss amount would be in addition to the accumulated depreciation. For example if the asset's historical value (purchase price) is 1,000 and its accumulated depreciation is 800, at the date of disposal, the remaining value, or the salvage value is 200. If the asset was sold at 200, there would not be any gain/loss. However, if it were to be sold above 200 (highly unlikely), there would be a gain, and is recorded at income statement. Do take note that there might be other accounting adjustments that would place, depending on what type of asset we are dealing with (assets held-to-maturity, trading, or available for sale).

Answer 4

no