This video shows how to account for the disposal of a fixed asset on the Statement of Cash Flows. The cash proceeds from the sale of the fixed asset are shown as a cash inflow in the cash flow from investing activities section. Any gain or loss recognized on the sale must be removed when adjusting Net Income to cash flow from operating activities to avoid double-counting (the only cash effect is the cash proceeds from the sale; an accounting gain or loss on paper doesn’t affect cash). In addition, the accumulated depreciation associated with the fixed asset is removed from the books. These concepts are illustrated in the video with a comprehensive example.