
Explanation:
Under IFRS:
Reclassification 1: Reclassifying interest received from operating to investing - This would DECREASE operating cash flows because interest received is moved out of operating activities.
Reclassification 2: Reclassifying interest paid from operating to financing - This would INCREASE operating cash flows because interest paid (a cash outflow) is moved from operating to financing activities.
Therefore, only Reclassification 2 would increase operating cash flows. Under IFRS, companies have flexibility in classifying interest and dividends, and moving interest paid out of operating activities would boost reported operating cash flows.
A
Reclassification 1 only
B
Reclassification 2 only
C
Both Reclassification 1 and Reclassification 2
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