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In cashflows, we subtract interest paid in Cash from operating activities. Shouldn’t it be subtracted in cash from financing activities?
No, it should be as in the pro forma taken from IAS7 that is printed in our free lecture notes.
Yes tutor. Can you please help me out why that so? Is there any reason or it is only as per standard?
It is an expense like any other expense. However because it is different than other running expenses, it is required to be shown separately as a deduction.