All of the following statements related to preparation of the statement of cash flows under U.S. GAAP and IFRS are true except:
A) Both U.S. GAAP and IFRS permit the reporting of cash flows from operating activities using either the direct or indirect method.
B) IFRS permits classification of cash outflows for interest expense under operating or financing based on which one results in better cash flows from operating activities.
C) IFRS permits classification of interest expense under operating or financing activities provided it is consistently applied across periods.
D) IFRS permits the splitting of income tax cash flows among operating, investing, and financing depending on the sources of that tax.
E) U.S. GAAP requires cash outflows for income tax be classified as operating activities.

Question

Quizplus · Accepted Answer

Under IFRS, interest expense can be classified as either operating or financing activities, but it must be applied consistently across periods, not based on which classification results in better cash flows.

All of the Following Statements Related to Preparation of the Statement