Respuesta :
When using the indirect method to complete the cash flows from operating activities section of the statement of cash flows depreciation is added back to the net income.
Depreciation is a non cash expense that is why it is added back to the net income while preparing cash flow statement under the indirect method. It also increases the cash inflows from operating activities.
When any depreciable asset is disposed off, an entry is made to recognize any unrecorded depreciation expense until the date of the disposition, and after this asset's cost and accumulated depreciation are removed from the general ledger accounts of the asset.
Any losses or gains which is associated with the disposition and is recognizable are recorded in the separate account and appear in the portion of the income statement named as other income or other expense. To know more about disposition of depreciable asset here:
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