23 Comments
 

I just did and I couldn't find it?

"Respect others in their view, and demand that they respect yours. Love your life, perfect your life, beautify all things in your life."
 
re-ib-nySome firms will embed some of their depreciation into other I/S line items (like COGS or G&A), so the D&A item on the I/S does not necessarily pick up all of the firm's D&A in a reporting period. The line item on the CF/S, however, will capture all of it, because all of it must be backed out of Net Income to get to CFFO.

What he said. Ignore other posts.

 
esbanker
kidflashD&A is not a cash item so it's not included on CF/s

You're joking, right?

What do you mean? You start from NI then add back D&A because it's a non-cash expense... so it's not included on the cashflow statements.

Sorry, I mean just depreciation. My mistake. Am I just being a total idiot?

 

Oh... I guess I didn't understand the wording. By it's not included, I meant the expense is eliminated from the statement of cash flows... My mistake on my wording.

 
kidflashOh... I guess I didn't understand the wording. By it's not included, I meant the expense is eliminated from the statement of cash flows... My mistake on my wording.
I mean it's really not. It is only an expense on the I/S because you're considering D&A as occurring over the lifecycle of whatever item you purchased, even though you paid the cost up-front when you purchased the item(s). It's just not a "use of cash", but you're not eliminating anything, nor are you "adding" cash even though it's conceptually easy to think about it that way.
 
Vontropnats
kidflashOh... I guess I didn't understand the wording. By it's not included, I meant the expense is eliminated from the statement of cash flows... My mistake on my wording.
I mean it's really not. It is only an expense on the I/S because you're considering D&A as occurring over the lifecycle of whatever item you purchased, even though you paid the cost up-front when you purchased the item(s). It's just not a "use of cash", but you're not eliminating anything, nor are you "adding" cash even though it's conceptually easy to think about it that way.

This sums it up.

Capitalist
 

Depreciation and Amortization is a non-cash expense so it should appear as a plain expense on a statement of operations and as an add-back to net income to arrive at cash flows from operations.

I can't think, off the top of my head, of a single instance where they'd be different amounts...

 
Professor ShortieI'm a professor at an ivy teaching FSA and financial modeling. Companies allocate D&A to a number of line items, including CGS and SGA. Sometimes you can find the detail in the notes, but sometimes you can't. The D&A amount from the SCF is the one to use in developing your model. If you have other questions let me know.

This. Can be in cogs, or any op ex. Rd, s and m, g and a.

-- "Those who say don't know, and those who know don't say."
 

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