Describe the treatment of each of the following items under IFRS versus GAAP. (a) Interest paid....

Describe the treatment of each of the following items under IFRS versus GAAP.

(a) Interest paid. (b) Interest received. (c) Dividends paid. (d) Dividends received.

Expert Solution

Item	Under IFRS	Under GAAP
Interest paid	It should be shown in either Operating or financing activity of Cash flows. IFRS does not make any distinction between the interest capitalized or expensed and all the interest paid will be shown in Cash flows.	U.S GAAP makes the distinction between the interest capitalized and interest paid and expensed. If it is paid and expensed then it should be shown in Cash from Operating Activity in Cash flow statement and if it is capitalized that are directly attributable to Property, plant & equipment then it must be shown in Investing Activity.
Interest received	It should be shown in either Operating or Investing activity of Cash flows	Interest received should be shown in Cash from Operating Activity in Cash flow statement
Dividends paid	It should be shown in either Operating or financing activity of Cash flows	It should be shown in financing activity of Cash flows
Dividends received	It should be shown in either Operating or Investing activity of Cash flows	It should be shown in Operating activity of Cash flows

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