id = "cash-flow.part-cash-purchase"
title = "Equipment bought part for cash, part on the seller's note"
rule = "Of a transaction that is part cash and part noncash, only the cash portion MUST be reported in the statement of cash flows; the rest MUST be disclosed as a noncash investing and financing activity."
status = "AUTHORITY"
sources = ["ASC 230-10-50-5", "ASC 230-10-50-3", "ASC 230-10-50-4", "ASC 230-10-45-13(c)", "EY Financial reporting developments, Statement of cash flows (July 2026) 5.3.1 (seller-financed purchases are noncash to the extent of the seller's financing)"]
tags = ["accrual", "book", "us", "cash-flow", "noncash"]

[setup]
currency = "USD"
fiscal_year_start = "01-01"
basis = "accrual"
rounding = "half-even"
cash_accounts = ["1000"]
# The note is the seller's own credit, not a lender's: it is not listed as
# financing (a lender that paid the seller would be: the purchase would
# then be borrowed and invested, cash-flow.paid-on-the-companys-behalf).

[[setup.accounts]]
code = "1000"
name = "Cash"
type = "asset"

[[setup.accounts]]
code = "1520"
name = "Vehicles"
type = "asset"

[[setup.accounts]]
code = "1530"
name = "Accumulated depreciation, vehicles"
type = "asset"

[[setup.accounts]]
code = "2500"
name = "Note payable to the seller"
type = "liability"

[[setup.accounts]]
code = "3000"
name = "Capital"
type = "equity"

[[setup.accounts]]
code = "6100"
name = "Depreciation"
type = "expense"

[[setup.fixed_assets]]
cost_account = "1520"
accumulated_account = "1530"
expense_account = "6100"

[[events]]
date = "2026-01-02"
description = "Opening contribution"
lines = [
  { account = "1000", side = "debit", amount = "10000.00" },
  { account = "3000", side = "credit", amount = "10000.00" },
]

[[events]]
date = "2026-02-08"
description = "Vehicle: 300 down, 700 on the seller's note"
lines = [
  { account = "1520", side = "debit", amount = "1000.00" },
  { account = "1000", side = "credit", amount = "300.00" },
  { account = "2500", side = "credit", amount = "700.00" },
]

# By hand: 300 left the bank for the vehicle (investing, 45-13(c)); the
# 700 the seller financed moved no cash, to anyone, and is disclosed (50-4:
# acquiring an asset by assuming a directly related liability). Cash
# 10,000.00 to 9,700.00 in February.
[[expect]]
query = "cash_flow"
from = "2026-02-01"
to = "2026-02-28"

[expect.values]
operating = "0.00"
investing = "-300.00"
financing = "0.00"
net_change = "-300.00"
cash_beginning = "10000.00"
cash_ending = "9700.00"
difference = "0.00"
"investing.2" = "-300.00"
"investing.count" = "1"
"noncash.2" = "700.00"
"noncash.count" = "1"