Module VI· Capex & Depreciation ScheduleIntermediate
Question

How do you treat asset disposals and impairments in the schedule?

Answer

Asset disposals reduce gross PP&E and accumulated depreciation / net PP&E. Cash proceeds go to investing cash flow, and gain or loss goes to the income statement. Impairments reduce asset carrying value and hit the income statement, but are non-cash and added back in the cash flow statement. Keep disposal proceeds separate from capex.