Suppose a company pays interest of $10,000 for the year on borrowed amounts due in two years.Under IFRS,what is the most the company can report this year as cash outflows from financing activities related to this item?
A)$10,000.
B)$2,000.
C)$5,000.
D)$0.

Question

Quizplus · Accepted Answer

Under IFRS, interest paid is classified as either operating or financing activities. The company can report the full $10,000 as cash outflows from financing activities if it chooses to classify interest paid as such.

Suppose a Company Pays Interest of $10,000 for the Year