I'm reading my chapter on Intangible Assets, particularly on whether the expenditure is capitalized or...
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Accounting
I'm reading my chapter on Intangible Assets, particularly on whether the expenditure is capitalized or recorded as an expense on the Income Statement.
It's written "Assets, equity, and operating cash flow are all higher when expenditures are capitalized." I understand for the first two mentioned. But why are operating cash flow higher? Firstly, because cash flows do not depend on the accounting method. Secondly shouldn't it be Investment cash flow? Why would the purchase of an intangible asset be in operating expenses? Thank you.
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