Property, plant and equipment and intangible assets for the purpose of presentation on the statement of cash flows are reported partly under all of the three grouping of cash flows a company can have. Since there are many aspects of acquiring and measuring for tangible and intangible assets, it only makes sense they are also disclosed differently.  

To start with the initial step of the whole process of owning an asset, it’s acquiring one. Acquisition in itself is an investment made for the benefit of the company and therefore cash flows arising from acquiring items of property, plant and equipment or intangible assets are part of investing activities on the statement of cash flows.

However, in case you acquired the asset with a finance lease, this acquisition is then shown under financing activities. The reason doesn’t lie behind the word ‘finance’ in both, but behind the fact that you didn’t essentially incur any cash flows from the acquisition, but you decided to finance the acquisition with someone else’s money that’s now also shown on your balance sheet as a Finance lease liability. Whenever you’re using someone else’s money to finance your company’s activities, it’s shown as a cash flow from financing activities.

As for the subsequent measurement, such movements are mostly disclosed under operating activities – depreciation, write-down and any impairment losses, incurred profits from sales etc. However, it should be noted that direct cash flows from sales, that is the money you receive from the third party for the sale of the asset, are disclosed under investing activities. Selling something you own is an investment if you think about it and as such it should be disclosed under investing activities rather than under operating or financing activities since it’s part of neither.