Reading 43: International Standards Convergence-LOS c 习题精 2011, accounting, concerning, standards, interest

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Session 10: Financial Reporting and Analysis: Applications and International Standards Convergence
Reading 43: International Standards Convergence

LOS c: Identify and explain the major differences between international and U.S. GAAP accounting standards concerning the treatment of interest and dividends on the statement of cash flows.

 

 

The CORRECT set of cash flow treatments as they relate to interest and dividends received according to U.S. generally accepted accounting principles (GAAP) and International Accounting Standards (IAS) GAAP is:

U.S. GAAP

IAS GAAP

A) CFO CFI or CFO

B) CFI or CFO CFI

C) CFI CFO

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U.S. GAAP treats interest and dividends received as CFO whereas IAS GAAP treats interest and dividends received as either CFO or CFI.

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Independence, Inc. reports interest received and dividends paid as part of its cash flow from operations. This treatment is acceptable under:

A) U.S. GAAP but not under IFRS.

B) either IFRS or U.S. GAAP.

C) IFRS but not under U.S. GAAP.

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IFRS permits interest received to be reported as either cash flow from operations or cash flow from investing, and permits dividends paid to be reported as either cash flow from operations or cash flow from financing. U.S. GAAP requires interest received to be reported as cash flow from operations, but requires dividends paid to be reported as cash flow from financing.