Classification Rule: US\ GAAP Interest Paid

CFA Level I Glossary

Under US GAAP, interest paid is classified as an operating cash flow (CFO). The financing alternative allowed under IFRS is not available for US GAAP reporters. Interest received is also operating under US GAAP, which can surprise candidates used to thinking of interest as pure financing. A classic trap is moving US GAAP interest paid into CFF because “interest is related to debt.”

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