Let's try an example. Firstly we'll ignore any disposals.
You can either get FC Inv by reconciling opening to closing gross PPE (NBV + accumulated deprec) or use net PPE but then deduct depreciation.
Eg NBV = 50 at the start of the year, depreciation for the year is 10 and closing NBV is 70.
50 - 10 + ? = 70 so here FC INv must be 30
Alternatively if opening accumulated deprec was 60 and closing accumulated deprec is 70 then this becomes:
110 + ? = 140 where FC Inv must be 30.
Now let's say during the year there was disposal. Assume we are told the proceeds are 10 and the gain on disposal was 2. This means the book value of the asset being sold must have been 8.
Now we have : 50 -10 - 8 +? = 70 so gross FC Inv't must now be 38. However since we want a cash amount then we need to offset this against the cash proceeds so in cash term we have spent 28 on new FC.
Finally when adjusting NI don't forget to deduct the gain of 2.
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