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Where will you show purchase of furniture in cash flow statement?

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Question added by Deleted user
Date Posted: 2013/08/26
Ashraf AbdulFattah
by Ashraf AbdulFattah , Executive Director , The Industrial Group

To know where an item will appear in a cash flow statement, you should ask the following: 1.
 Is the item treated as an expense or an asset? 2.
Did you pay for the item? 3.
How did you pay for the item? ( your own cash, utilizing bank facilities, installments, etc) Depending on the above answers, you will know in which section this transaction will appear.
For example if purchase of furniture is considered an asset and you didn't pay for it, the net effect on cash will be zero and this transaction will be reflected in the cash flow statement as cash inflow in the changes in working capital (specfically payables) and as cash outflow in investing activities ( specifically purchase or sale of fixed assets).
Different answers to the three questions above will reflect differentlly in cash flow statement.

Prince Ninan
by Prince Ninan , Audit Executive , Lewis & Pecker

If purchase of furniture is capitalised it is shown under investing activity. If it is treated as revenue expenditure then it will not come directly in cash flow statement, if purchased on credit then it will be shown operating activity by way of increase in creditors.

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salah khiri
by salah khiri , محاسب عام , شركة رضايات التجارية المحدودة

investing activity.

reem talal ziad assaf
by reem talal ziad assaf , general assistant ( customer services) , imperial collage london

Fixed assets( long term assets) 

Sheraz Tarar FCCA, CIA
by Sheraz Tarar FCCA, CIA , Finance Officer - Senior Manager , Humania Capital

If the furniture you have purchased is a capital expenditure and appearing as part of your fixed assets on balance sheet than then it will be shown under 'investing activties' in cash flow statement. If t is expenses out then it wil not be shown as separate line item in cash flow statement. It's effect will be coming into cashflow statement in the top number (i.e. 'net profit for the year')

Nagoorammal Abdul Rahman
by Nagoorammal Abdul Rahman , Finance Manager , Vox Spectrum Limited

furnitures are treated as Fixed assets.
if it is a Fixed asset as treated by the company, it can be shown in the investment column since it is an investment on FA.
If the amount involved is not material and the company decided to write it off as an expenses it will come an operational expenses.

If we assume that the purchase of furniture has caused cash outflow and it is recorded in books of accounts as an asset, then its cash flow should be recorded in the "Cash flow from Investing Activities".
And if it relates to the trading of furniture, then its cash flow should be recorded in the "Cash Flow from Operating Activities"

طارق محمد عثمان سليم سليم
by طارق محمد عثمان سليم سليم , مدير مالى بمصنع تقنية اللواصق لمنتجات التعبئة والتغليف , شركة الأصالة الدولية للتجارة

furnitures if  treated as Fixed assets.will be shown in the investment projects  furnitures if  treated as current assets it will come at  operational projects

Ihsan Bajwa
by Ihsan Bajwa , Chief Accountant , Green Bird Trading Co. LLC

Purchase of Furniture is part of INVESTING ACTIVITIES (off course only if its paid).

Atif Irshad
by Atif Irshad , Sr. Accountant , china Railway Construction company

If the Furnitures is treated as Fixed assets, it can be treated as Capital Investment while If the amount involves is an expenditure it will come an operational expense.

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