Net Change in Long-Term Investments

Category

Cash Flow

Units

Currency

Formula

Decrease in Long-Term Investments − Increase in Long-Term Investments

US-GAAP elements

PaymentsForProceedsFromInvestments

Reference

ASC 230, Statement of Cash Flows (investing activities)

Source

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

Net change in long-term investments is the net cash effect of a company's purchases and sales of longer-term investments during a period: cash received from sales, maturities, and collections, minus cash spent on new purchases. It is a component of the investing section of the cash flow statement.

A negative figure means the company put more cash into investments than it took out. A positive figure means it drew down its investment holdings on a net basis.

ASC 230 generally requires investment purchases and proceeds to be shown gross, so this figure is typically calculated from figures reported in SEC filings. A few filers present one net line, which may be tagged PaymentsForProceedsFromInvestments in XBRL. That element is framed as a net payment, so a positive XBRL value is a net outflow, the opposite of this measure's sign. Net reporting is allowed for investments with quick turnover, large amounts, and maturities of three months or less, but most longer-term holdings must be reported gross.

The figure measures cash moved, not the change in the balance sheet. Unrealized gains and losses, impairments, reclassifications between short-term and long-term as maturities approach, and currency effects all change the reported investment balance without any cash flow. That is why the net cash figure and the change in the balance sheet line rarely match.

Analysts use the net figure to separate treasury activity from true business investment. A company whose investing outflows are dominated by net purchases of securities is repositioning its cash, not expanding. Adding the net change in investments to the net change in cash gives a better sense of how total liquidity moved. For free cash flow, investment purchases and sales are excluded entirely, because they convert cash into near-cash rather than consuming it.