rent received by a company whose business is classified as operating expenses for real estate business and as investing activities - Accountancy - Cash Flow Statement

Question

rent received by a company whose business is classified as
operating expenses for real estate business and as investing
activities for manufacturing expenses???

Jayati Jawa · Accepted Answer

Hi Diksha

Suppose you are an owner of 100 flats and a proprietor of Real
Estate business too For you, giving flats on rent, selling flats,
purchasing flats will be an operating activity since it is the hard
core activity of your business Right?

So, when rent is received from such flats, it will also be treated
as an operating activity (income from operations)

However, the same is not the case for manufacturing business Their
main activity is sale and purchase of goods Letting out an
accommodation for such a business will be an investment activity,
so, rent received from such accommodation will also be considered
as investing activity

Hope this clarifies your doubt!!

rent received by a company whose business is classified as operating expenses for real estate business and as investing activities for manufacturing expenses???