[Foundation-l] Posting of Mid-year financial statements
thomas.dalton at gmail.com
Fri Feb 22 19:56:38 UTC 2008
> Quick dumb question: Can you explain how depreciation of furniture and
> equipment positively impacts the organizations cash position? Related,
> perhaps, to an overestimate on the impact of depreciation as an expense?
I was a little confused by that. I think all the signs are the
opposite of what you would expect. It's not laid out as:
Cash at beginning of period
=Cash at end of period
It's starting with net income and reconciling that with cash flow.
Depreciation is positive because it has a negative affect on income
but no affect on cash flow (it doesn't involve cash), so has to be
added back on to get from net income to net cash flow.
More information about the foundation-l