The Daily Technical #48: Which section of the cash flow statement captures interest expense?

Good morning. Welcome to the 48th edition of The Daily Technical. You’re here for one reason so let’s dive in.

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OVERVIEW OF YESTERDAY’S QUESTION
Do companies depreciate land?

While classified as a long-term asset on the balance sheet, land is assumed to have an indefinite useful life under accrual accounting, and therefore depreciation is prohibited.

Common Mistakes

1. Assuming all long-term assets depreciate. Avoid this by clearly emphasizing the distinction based on useful life.

TL;DR

• Land, unlike other assets, is not depreciated due to its indefinite useful life.

TODAY’S QUESTION
Which section of the cash flow statement captures interest expense?

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THAT’S A WRAP
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See you tomorrow,

The HirePrep Team