Question

What types of activities should be included in the Investing Activities section? Give some specific examples to support your answer.

Answer 1

-->> Investing activities include cash activities related to non - current assets.

Non-current assets include (1) long-term investments; (2) property, plant, and equipment; and (3) the principal amount of loans made to other entities.

The purchase of these long-term assets is shown as a negative amount in the investing activities section ,because the acquisition will use (will reduce) cash.

The proceeds (money received) from the sale of long-term assets will also be reported in the investing activities section of the cash flow statement. The money received will appear as a positive amount.

For example, cash generated from the sale of land and cash paid for an investment in another company are included in this category. (Note that interest received from loans is not included in investing activities.)