So Afternoon CFAI Mock Q 37, answer says IFRS classifies interest expense as an operating CF. How on this problem do you know that? I was under the impression that you can classify it as EITHER and OPERATING OR FINANCING. The laoyut doesn’t seem very clear and the footnote kind of implies it, but it throws me off a little bit.
In the vignette it says they classify interest expense as a financing CF. You’re right, under IFRS, they do have the option to classify it as EITHER OCF of FCF. But the vignette tells you it’s a financing cash flow. I don’t know what you’re looking at in the answer that says IFRS classifies interest expense as an OCF. Mine does not say that. “LRSC classifies interest expense as a financing cash flow.”