Disposal of Fixed & Intangible Assets

Category

Cash Flow

Units

Currency

US-GAAP elements

ProceedsFromSaleOfProductiveAssets

Reference

ASC 230, Statement of Cash Flows (investing activities); ASC 360

Source

Reported in SEC EDGAR filings (US-GAAP XBRL taxonomy)

Disposal of fixed and intangible assets is the total cash a company received during a period from selling long-lived operating assets, both physical assets such as buildings, equipment, and vehicles and intangible assets such as licenses, patents, and software. It is an inflow in the investing section of the cash flow statement.

It covers individual assets or groups of assets sold outside the normal course of business. Proceeds from selling an entire business or subsidiary are reported separately as divestitures.

ASC 230 classifies cash received from selling property, plant, and equipment and other productive assets as investing inflows. The XBRL element ProceedsFromSaleOfProductiveAssets represents the combined figure for physical assets, software, and other intangibles. Companies that report the two kinds of assets on separate lines use more specific elements, and the combined total is then calculated from figures reported in SEC filings.

The line shows the full cash proceeds, not the gain or loss. If a company sells equipment with a book value of 60 for 100 in cash, the investing section shows 100 as an inflow, and the operating section subtracts the gain of 40 from net income so it is not counted twice. A loss on sale works the other way and is added back. Sales financed by the buyer with a note receivable are noncash until collected, and assets traded in on new equipment reduce the cash paid rather than appearing as proceeds.

Most companies sell equipment routinely as they replace it, so small recurring proceeds are normal. Large or unusual inflows deserve attention: sale-leaseback transactions on real estate, sales of spectrum or other licenses, and the disposal of idle plants can all produce big one-time figures. Analysts computing net capital spending subtract these proceeds from gross purchases, but they should avoid treating a one-off asset sale as recurring cash flow when projecting the business.