Module VI· Cash Flow Statement MechanicsIntermediate
Question

How do you book the D&A add-back correctly in the cash flow statement?

Answer

D&A reduces net income but is non-cash, so it is added back in CFO under the indirect method. The asset side is reduced through accumulated depreciation or lower PP&E / intangibles. Do not add back D&A twice. If D&A includes amortization of financing fees or intangibles, ensure classification is consistent.