- CFA Exams
- 2025 Level I
- Topic 4. Financial Statement Analysis
- Learning Module 4. Analyzing Statements of Cash Flows I
- Subject 6. IFRS and US GAAP Differences
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Subject 6. IFRS and US GAAP Differences PDF Download
The previous discussions are based on the U.S. GAAP.
Under IFRS there is some flexibility in reporting some items of cash flow, particularly interest and dividends.
Interest and dividends received:
- Under U.S. GAAP, interest income and dividends received from investment in other companies are classified as CFO.
- Under IFRS, interest and dividends received may be classified as either CFO or CFI.
Interest paid:
- Under U.S. GAAP, interest paid is classified as CFO.
- Under IFRS, interest paid may be classified as either CFO or CFF.
Dividends paid:
- Under U.S. GAAP, dividends paid are classified as CFF.
- Under IFRS, dividends paid may be classified as either CFO or CFF.
Taxes paid:
- Under U.S. GAAP, they are CFO.
- Under IFRS, they are generally CFO but a portion can be CFI or CFF.
User Contributed Comments 1
| User | Comment |
|---|---|
| edrei7 | Whether you assume that interest expense is already included in CFO or not depends on the accounting standard, US GAAP or IFRS. In US GAAP, interest paid is classified as an operating activity. In IFRS however, it can be classified as a financing activity or operating, and usually, it's the former. |
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