How to Answer Asset Sale Accounting Questions in Investment Banking Interviews

Asset-sale questions test whether you can distinguish accounting profit from cash proceeds and connect all three financial statements. The cleanest approach is to calculate the gain or loss first, then work through the income statement, cash flow statement, and balance sheet in that order.

Author: Alex Johnson Updated 4 min read

Start With Book Value, Sale Proceeds, and the Gain or Loss

An asset’s book value, also called carrying value, is generally its original cost minus accumulated depreciation and any impairment charges. The gain or loss equals sale proceeds minus book value.

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