In a Cash Flow Statement, the proceeds from selling shares that were held in another company would appear:[Fill in the blank]

Question

BlackTom AI · Accepted Answer

Proceeds from selling ownership of another company are treated as cash inflows from investing activities because they arise from disposing of an investment asset.

1. Relevant knowledge points and concepts
- A cash flow statement is divided into three sections: Operating, Investing, and Financing activities (IAS 7 / US GAAP guidance).
- Investing activities include cash flows from acquisition and disposal of long‑term assets and investments (e.g., property, plant & equipment, and equity investments in other entities).
- Cash inflows (receipts) are shown as positive amounts; cash outflows (payments) are shown as negative amounts.

2. Step‑by‑step reasoning
- Identify the transaction: selling shares that the reporting company held in another company = disposal of an investment asset.
- Classify the nature: disposal of an investment is an investing activity, not an operating or financing one.
- Determine the sign: “proceeds from selling” means cash received by the reporting company → a cash inflow → positive amount.

3. Calculations
- No numeric calculation is required for classification. Conceptually:
  Cash from sale = proceeds received (positive inflow)
  If the company had purchased shares, that would be cash paid (negative investing cash flow).

4. Why the correct answer is correct
- By definition, selling an investment converts a non‑cash long‑term asset into cash, and this conversion is reported in the Investing section as a positive amount because cash is received.

5. Why the other options are incorrect
- Operating activities: relate to core business revenue/expenses; selling another company’s shares is not part of regular operations (unless trading securities are core to the business).
- Financing activities: involve transactions with owners or lenders (issuing debt or equity, dividend payments); selling a third‑party’s shares is not financing the reporting entity.
- Investing as a negative amount or financing as a negative amount would imply a cash outflow (a purchase or repayment), which contradicts “proceeds” (a receipt).

Conclusion: The proceeds should be shown Under Cash Flows from Investing Activities as a positive amount, which matches the provided answer.

In a Cash Flow Statement, the proceeds from selling shares that were held in another company would appear:[Fill in the blank]单项选择题

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