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Basis for Conclusions Cases
Basis for Conclusions Case 1 : Classification of Interest and Dividends on the Statement of
U.S. GAAP and IFRS differ in the classifications of dividends and interest on the statement of cash flows. U.S. GAAP requires firms to classify cash receipts from interest and dividends and cash payments for interest as operating cash flows However IFRS allows entities to report these items in any of the three categories—operating investing or financing Read the basis for conclusions in “Statement of Cash Flows.” FASB Statement of Financial Accounting Standards No 95. Paragraphs 88 through 90
- 1. Where did certain respondents think these cash receipts and payments should be classified ? What was their reasoning?
- 2. What was the Board’s reasoning for requiring that firms include these items in operating cash flows?
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