With respect to the treatment of activities in cash flow statements, there are some differences in IFRS and US GAAP.
|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.