IFRS classification: Dividends Paid

CFA Level I Glossary

Under IFRS, dividends paid may be classified as either operating (CFO) or financing (CFF) cash flow, with consistency required once chosen. US GAAP requires financing classification. Choice affects CFO and free-cash-flow style metrics even though total cash is unchanged. Assuming every firm must put dividends in CFF will miss IFRS flexibility questions.

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