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I think this is just a limitation of QBO reporting. Most business entities would classify the non-cash depreciation expense on the cash flow statement as an investing activity but, because your business is real estate, it should be classified as operations as you alluded to. Unfortunately, it can't be reclassified to operations in QBO.
I can not answer the cash flow reporting question since I do not believe that a paper expense belongs in a cash flow report.
But as I understand it, depreciation should post to its own account. My understanding is that the cost of the asset is not changed once it is booked. I usually set it up something like this
Fixed Assets
>> Asset name or address
>> >> asset cost
>> >> accum. depreciation asset
I think this is just a limitation of QBO reporting. Most business entities would classify the non-cash depreciation expense on the cash flow statement as an investing activity but, because your business is real estate, it should be classified as operations as you alluded to. Unfortunately, it can't be reclassified to operations in QBO.
Thanks for the explanation! The ultimate goal is to generate a clear monthly cash flow view to assess the rental performance at each property itself. By customizing the Statement of Cash Flows to display columns by Months, it worked perfectly.
Hello, Rainflurry.
I appreciate you for always sharing your knowledge about QuickBooks. This will definitely help other users as well in the future. Please keep on posting here in the Community.
Keep safe and have a great rest of the day.
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