Concept
Investing Activities
Investing activities involve buying and selling long-term assets and investments. Cash outflows include purchases of property, equipment, or investments. Cash inflows include proceeds from selling these assets.
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FARLesson 4 of 5
Investing & Financing Activities
Example
Financing Activities
Financing activities involve transactions with owners and creditors.
Inflows: Issuing stock, issuing bonds/notes payable, borrowing
Outflows: Paying dividends, repurchasing treasury stock, repaying debt principal
Note: Interest payments are classified as OPERATING under US GAAP.
Key Point
Non-Cash Transactions
Significant non-cash transactions (e.g., issuing stock to acquire land) must be disclosed in supplemental notes, not in the body of the statement.
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