How do you treat interest payments in the cash flow statement — IFRS vs. US GAAP?

interest payments are a mandatory part of OCF. Rationale: interest is an operating expense and runs through net income. IFRS (IAS 7): optional — interest payments may be shown in OCF OR in financing cash flow. Interest / dividends received are likewise optional (OCF or investing). Impact on IB practice: when comparing comps of US companies vs. IFRS reporters (e.g. Microsoft vs. SAP), OCF can differ structurally — if an IFRS reporter like SAP moves interest paid into financing, its OCF is higher, all else equal, than a US GAAP reporter's, which must show interest paid in OCF (interest received is likewise mandatorily OCF under US GAAP). Adjustment in the model: for clean comps, standardize OCF to 'IFRS, interest in financing' or 'GAAP, interest in OCF'.