Hello,
Came across the below question
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Answer is A… everything being subtracted except the Interest expense. I’m confused as to why this is not included. I know under IFRS, Interest paid can be an operating or financing activity, but under U.S GAAP it has to be operating. What am I missing here? Why is it not included?
You are mixing income statement and cash flow statement principles. Under US GAAP, interest paid is an operating activity within the cash flow statement. However, it is not an operating cost in the income statement and should therefore not be included in the operating result.
Restructuring costs mean = restructuring costs of debt ??? Why is it an operating expense? Shouldnt it be an extraordinary ítem?
No: restructuring the company (e.g., expenses incurred in selling off a division).
No more extraordinary items according to GAAPs for a while. This term was misused frequently before. There are “Other” non-EBIT items anyway.
Regarding cost of restructuring, there still might be differences between USGAAPs and IFRS in recognizing those.