Selling equipment for cash is reported on the statement of cash flows under

Generally, cash receipts and cash payments are reported as gross rather than net. Two exceptions to the gross reporting are:

• Cash purchases and sales of cash and cash equivalents
• Assets and liabilities for which the turnover is quick and the maturities are three months or less (such as debt, loans receivable and the purchase and sale of highly liquid investments)

1. Cash Flows from Operating Activities

   Cash flows from operating activities result from providing services and producing and delivering goods. They include all other transactions not defined as noncapital financing, capital and related financing or investing activities. The operating activities section is, in a sense, a “catch-all” category.

   Cash inflows (proceeds) from operating activities include:

   • Cash receipts from sales of goods and services including receipts from collection of accounts receivable and both short/long-term notes receivable from customers and students arising from those sales
   • Cash receipts from quasi-external operating transactions with other funds
   • Grant receipts for activities considered as operating activities of the grantor government
   • Cash receipts for reimbursement of operating transactions
   • Cash receipts from collection of program loans

     Note: “Program loans” are loan programs undertaken to fulfill a governmental responsibility (such as low-income housing mortgages and student loans). As the loans made and collected (including the interest) are part of a governmental program, the loan activities are reported as operating activities, rather than investing activities.

   • Cash contributions to a defined benefit pension plan administered through a trust that meets the criteria in GASB 68, paragraph 4, or to a defined benefit OPEB plan administered through a trust that meets the criteria in GASB 75, paragraph 4.
   • Other cash receipts not classified in the other categories.

   Cash outflows (payments) from operating activities include:

   • Cash payments to suppliers of goods and services
   • Cash payments to employees for services including benefits

     Note: Separate accounts payable and payroll payable when determining the cash payments.

   • Cash payments for grants considered to be operating activities of the grantor
   • Cash payments for quasi-external operating transactions (including payments in lieu of taxes)
   • Cash payments for program loans
   • Cash payments for pensions or OPEB regardless of whether the defined benefit pension plan or defined benefit OPEB plan is administered through a trust that meets the specified criteria of either GASB 68, paragraph 4, or GASB 75, paragraph 4, respectively.
   • Other cash payments not classified in the other categories
2. Cash Flows from Noncapital Financing Activities

   Cash flows from noncapital financing activities include borrowing money and repaying the principal and interest on amounts borrowed for purposes other than to acquire, construct or improve capital assets.

   Cash inflows (proceeds) from noncapital financing activities include:

   • Cash receipts from short and long-term borrowings used for purposes other than to acquire, construct or improve capital assets
   • Cash receipts from grants and voluntary non-exchange transactions (gifts) not used for capital assets or for specific activities considered to be operating activities of the grantor
   • Cash receipts from other funds except amounts used for capital assets, quasi-external operating transactions or reimbursement for operating transactions
   • Cash receipts from property and other taxes not specifically restricted for capital purposes
   • Cash receipts from proceeds of state appropriations

   Cash outflows (payments) for non-capital financing activities include:

   • Repayments of principal and interest on borrowings for purposes other than acquiring, constructing or improving capital assets
   • Grant payments to other governments or organizations for activities not considered as operating activities of the grantor

     Note: It is irrelevant whether the grantee uses the grant as an operating subsidy or for capital purposes.

   • Cash payments to other funds except for quasi-external operating transactions
3. Cash Flows from Capital and Related Financing Activities

   Cash flows from capital and related financing activities include acquiring and disposing of capital assets, borrowing money to acquire, construct or improve capital assets, repaying the principal and interest amounts and paying for capital assets obtained from vendors on credit.

   Cash inflows (proceeds) from capital financing activities include:

   • Receipts from proceeds of issuing or refunding bonds and other short or long-term borrowings used to acquire, construct or improve capital assets
   • Receipts from capital grants awarded to the governmental enterprise or other contributions for capital assets
   • Receipts from contributions made by other governments, organizations or individuals (gifts) for the specific purpose of defraying the cost of acquiring, constructing or improving capital assets
   • Receipts from sales of capital assets and proceeds from insurance on capital assets that are stolen or destroyed
   • Receipts from special assessments or property and other taxes levied for capital purposes

   Cash outflows (payments) for capital financing activities include:

   • Payments to acquire, construct or improve capital assets
   • Payments on principal and interest or refunding on amounts borrowed for capital assets

     Note: Proceeds of a refunding debt issue used to refund capital debt are reported in the capital and related financing category. Likewise, subsequent principal and interest payments on the refunding debt are also reported as cash outflows in the capital and related financing category.

4. Cash Flows from Investing Activities

   Cash flows from investing activities include making and collecting loans (except program loans; see Cash Flows from Operating Activities) and the acquisition and disposition of debt or equity instruments.

   Where does sale of equipment go on cash flow statement?

   On the statement of cash flows, the proceeds from the sale of a long-term asset is reported as a positive amount in the investing activities section.

   Is selling equipment for cash a financing activity?

   Answer and Explanation: The sale of equipment for cash would be considered an investing activity.

   Is selling equipment an investing activity?

   The purchase or sale of a fixed asset like property, plant, or equipment would be an investing activity.

   What kind of activity is sold equipment for cash?

   Explanation: Cash received from selling equipment is reported in the investing activities section of the statement of cash flows.