Investing Activities Definition – What are Investing Activit

Accounting Glossary 

Investing activities definition. Analyzing the definition of key terms often provides more insight about concepts. Investing activities can be defined as – Transactions that involve purchasing and selling of long-term assets; includes making and collecting notes receivable and investments in other than cash equivalents. Cash flows from investing activities is one of three main section of the statement of cash flows. Cash flows from investing activities includes what many people traditionally think as investments, investments being purchases and payment for stocks and bonds in other companies, but investing activities also include the purchase and sale of property plant and equipment. The term investing can be confusion because it can be used to mean different things when used in various contacts. All assets of a corporation are a form of investment because they are resources we have not yet consumed, resources owned by the business for generating revenue in the future. Fixed assets, in particular, are long term investment because fixed assets will be used to help generate revenue for many periods into the future and this is why cash flow from the sale or purchase of fixed assets belongs in the investing activities section of the statement of cash flows.