Under International Financial Reporting Standards (IFRS), reported operating cash flows are most likely to be increased by the classification choice made for:
- impairment losses on fixed assets.
- dividends paid.
- interest expense.
Solution
C is correct. IFRS allows the classification of interest expense as either an operating or a financing cash flow. When interest expense is shown as a financing cash flow, reported operating cash flows are higher.
A is incorrect because IFRS does not allow classification of impairment losses as anything other than an operating cash flow.
B is incorrect because IFRS allows classification of dividends paid as either an operating or a financing cash flow. However, when dividends paid is shown as an operating cash flow, reported operating cash flows are lower.
why not B is the Answer?