Profit on the sale of a fixed asset is a slightly tricky issue. When a fixed asset is sold at a profit, the cash inflow is larger than the net reduction in the value of Fixed Assets.When preparing the Cash Flow statement, the actual amount received on the sale of the fixed asset is shown as a source of cash.Given that this amount is greater than the net reduction in the relevant fixed asset’s balance, profit on sale, as included in the profit and loss account, should be deducted from the net profit figure.