Asked by Kibre Dubiso on Jun 11, 2024
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Discuss the basis of classifying cash flows arising from interest paid.
Interest Paid
The total amount of interest payments made on any borrowed funds or debt over a specific period.
- Differentiate and classify distinct forms of cash flow processes, including those related to operating, investing, and financing.
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SB
Shakeria BristerJun 16, 2024
Final Answer :
Interest paid:
- AASB107 provides guidance as to the classification of interest paid as an operating cash flow.
- However,there is a view that interest paid is a financing cash flow.
- Where interest costs relate to the provision of working capital,they are seen as operating; however,in relation to the acquisition of a qualifying asset,they may be regarded as an investing cash flow.
- AASB107 provides guidance as to the classification of interest paid as an operating cash flow.
- However,there is a view that interest paid is a financing cash flow.
- Where interest costs relate to the provision of working capital,they are seen as operating; however,in relation to the acquisition of a qualifying asset,they may be regarded as an investing cash flow.
Learning Objectives
- Differentiate and classify distinct forms of cash flow processes, including those related to operating, investing, and financing.
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