The FASB classifies interest received on investments and interest paid on debt financing as part of operating cash flows,while the IASB:
A)Allows interest received to be classified as either operating or investing and interest paid as either operating or financing.
B)Allows interest received to be classified as either operating or financing and interest paid as either operating or investing.
C)Allows interest received to be classified only as investing and interest paid only as financing.
D)Allows interest received to be classified only as financing and interest paid only as investing.

Question

Quizplus · Accepted Answer

The IASB allows for more flexibility in classifying interest received and paid, allowing them to be classified as either operating, investing, or financing cash flows. This differs from the FASB's classification which considers them strictly as part of operating cash flows.

The FASB Classifies Interest Received on Investments and Interest Paid