[deviant88]

Hi Haider,

Thanks for your comment and highlighting the fact that Standard is flexible with treatment of Interest charges. Appreciate that!
Though showing under operational activities do make sense. An Entity should earn enough cash through its operating activities (which are also primary source revenue generation) to make for mandatory payments as clarified by Chris earlier.
Thanks Again!

[deviant88]

Thanks for your comment.

Yeah! It is more relevant for users of FS to show where it is placed.
Ideally operational cash flow should be large enough to at least cover up both taxes and finance cost!

I query to not belittle anyone or pin point mistakes but to have my logics clear.
Thanks again for input, it matters.

[deviant88]

Thanks for your revert.

But my question was, isn’t it wrong to allow capitalisation of borrowing cost at “net” of interest costs of unutilised funds.

I mean we should not allow interest income to be adjusted against interest expense for those funds which are temporarily investment outside business.
Just like when there is halt in construction activities.

It should directly hit SOPL as interest income and expenses separately for those unutilised (50m).

What do you think?

[deviant88]

Fair enough if we look from that perspective of “mandatory payment”.

But how I see, real purpose of SOCF is to identify sources and application of cash by entity during f.year and ultimate reconciliation of opening and closing cash balances.
Payment of Interest does not obligate from operational activities but from borrowing of funds. It doesn’t matter if I do intended business I am still suppose to make payment.

For taxation we still can agree, we are paying taxes for profits generated out of operational activities.
What do you personally think?

[Author]

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