Managers borrow money to repurchase shares. Would this be CFF in and CFF out? Under GAAP and IAS
The repurchasing of stock will represent a cash outflow, while the borrowed funds a cash inflow. All will be under financing activities under both GAAP and IAS.
Cheers Joe
If the managers borrows money in exchange of shares, this would be a noncash transaction, that would be reported in the footnotes, not on the statement of cash flows. Other than this, both would be treated as CFF, the borrowing as an inflow, the buying back of shares as an outflow. GAAP and IFRS differ at: (a) interest received: CFO under GAAP, CFO or CFI under IFRS (b) interest paid: CFO under GAAP, CFO or CFF under IFRS © dividends received: CFO under GAAP, CFO or CFI under IFRS (d) dividends paid: CFF under GAAP, CFO or CFF under IFRS (e) bank overdrafts: CFF under GAAP, no particular classification under IFRS, this is assimilated to a cash equivalent and is not reported on cash flow statement (f) taxes paid: CFO under GAAP, but it could partially be CFO, CFI or CFF under IFRS, depending on the activity generating the taxes.
sweet, nice summary. Thanks