Investing and financing activities that do not involve cash are not reported in the cash flow statement since there is no cash flow involved.
For example, capital items of property, plant and equipment are often acquired through non-cash investing and financing activities. An equipment is purchased (investing activity) which is financed by equipment-purchase financing (financing activity). This will increase the company’s productive capacity; however, it will not be reported as capital expenditure in the statement of cash flows.
These non-cash investing and financing activities are reported in a separate disclosure supplement to the statement of cash flows. Examples include stock issued to make an acquisition or items of property, plant and equipment acquired in transactions in which the seller provides debt financing. These transactions result in a transfer of assets, but no cash is involved.