An amount shown in parenthesis within the investing activities section of the cash flow statement indicates that cash was used to purchase a long-term asset . For example, if a company spent $350,000 to purchase property, plant and equipment, it will be reported in the cash flows from investing activities as Capital expenditures ....(350,000) .
The amounts appearing in parenthesis can be thought of as indicating the following:
- cash flowed out
- cash was reduced
- cash was used
- it was not good for the cash balance
Positive amounts , which are the amounts not in parenthesis, indicate:
- cash flowed in
- cash was increased
- cash was provided
- it was good for the cash balance
The amounts received from the sale of long-term assets will be shown without parenthesis. For example, if the company sells some of the equipment it had used in the business, the amount received will appear as a positive amount.
