Noncash Investing and Financing Activities
Important Transactions That Do Not Affect Cash
Some investing and financing activities do not involve cash but are still significant enough to require disclosure. These transactions are excluded from the Statement of Cash Flows but disclosed separately.
- Issuing stock to acquire equipment.
- Converting bonds into common stock.
- Acquiring assets through finance leases.
- Exchanging noncash assets.
Note
Noncash transactions are disclosed in supplementary schedules or notes rather than included in the cash flow statement.
Summary
Significant noncash investing and financing activities are disclosed but not reported as cash flows.