Inflation vs Deflation?Recently there has been a lot of talk about whether US economy is headed towards deflationary enviro...
Lessons
- Cash Flow Statement
- Noncash Investing and Financing Activities
- Cash Flow Statements: US GAAP Vs. IFRS
- Cash Flow Statements - Direct and Indirect Method
- Significance of Cash Flows
- Steps to Prepare Statement of Cash Flows
- Cash Flow from Operating Activities
- Cash Flow from Investing and Financing Activities
- Free Cash Flow to the Firm and Equity
Cash Flow Statements: US GAAP Vs. IFRS
With respect to the treatment of activities in cash flow statements, there are some differences in IFRS and US GAAP.
| Activity | US GAAP | IFRS |
| Dividend paid to shareholders | Financing activity | Operating or financing activity |
| Interest paid on loans | Operating activity | Operating or financing activity |
| Interest and dividend received | Operating activity | Operating or investing activity |
| Taxes paid | All taxes reported as operating activity | Income tax reported as operating activity except when tax is an expense related to investing or financing activity |
An example of the tax treatment is provided below. Assume that a company sold land for $100,000 and paid taxes worth $10,000. Under US GAAP, we will report $100,000 as inflow from investing activity and $10,000 as outflow from operating activity. Under IFRS, we will report net inflow of $90,000 from investing activity.
You may find these interesting
Is a Double Dip Possible in US Housing Sector?Today's data about existing home sales woke fears about the possibility of a double dip recession in...
U, V, W, L, the letters of US economyLast Friday Ben Bernanke tried to give markets confidence back by announcing that FED would apply mo...
Secondary Market: Exchanges Vs. OTC MarketOnce the securities have been issued in the primary market, they become available for purchase and s...
Risk of a Single Cash Position**BetaSquare are a USD-based firm with one asset: JPY 14 billion in cash. What is the 95% worst-case...
Risk of Two Cash Positions**You now have two assets: JPY 1 billion + THB 4 billion. What is the risk over a 1-day period?**
*...
Financial Statements: Structures and RelationshipThough it is said organisations have an indefinite life, in reality they do have a particular life c...
Understanding Income StatementsA lot of things hinge on a company’s profit. Profits determine bonuses, dividends to share holders, ...
Understanding Cash Flow StatementThe cash flow statement of a business tells us about the movement of cash in the business based on t...
Equity Vs. Debt FinancingChoosing between equity and debt is one of the most common decision made by business managers while ...
Related Downloads
Related Quizzes
Finance Train Premium
Accelerate your finance career with cutting-edge data skills.
Join Finance Train Premium for unlimited access to a growing library of ebooks, projects and code examples covering financial modeling, data analysis, data science, machine learning, algorithmic trading strategies, and more applied to real-world finance scenarios.
I WANT TO JOINJOIN 30,000 DATA PROFESSIONALS
Free Guides - Getting Started with R and Python
Enter your name and email address below and we will email you the guides for R programming and Python.
