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Why depreciation expense is not included in the cash flow statement?

April 26, 2017Cash flow depreciation expense included

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Why depreciation expense is not included in the cash flow statement?

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10 Posted

Depreciation Expense, though called an expense, is not an expense where the company actually pays money out. The statement of cash flows deals with the company’s “cash flow” in order for a manager to see where the company’s cash is going to and coming from. Since depreciation expense doesn’t involve actual cash flow, it would not affect the Cash account.