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Hello Tutor
How is interest paid and how is interest received recorded in the cashflow statement when using the indirect method?
Thanks!
I expand both in my free lectures on this.
Interest paid appears under ‘cash flows from operating activities’.
Interest received appears under ‘cash flows from investing activities’.
The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
Hi Tutor
thank you for helping clear this
Can I ask why interest paid is under operating and interest received is under investing? Why are they both not classified the samethank you so much
Because they are two different things. One is a payment that has to be made out of the profits, the other is income from investing.
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