Explanation

Under IFRS (International Financial Reporting Standards), interest paid can be classified in either the operating or financing section of the statement of cash flows. This provides flexibility in presentation.

Under US GAAP (Generally Accepted Accounting Principles), interest paid must be classified in the operating section only.

Therefore:

• Option A is correct: Under IFRS, interest paid can be in either operating or financing section.
• Option B is incorrect: Under US GAAP, interest paid must be in the operating section, not either operating or financing.
• Option C is incorrect: Interest is not only in the financing section under both standards; under IFRS it can be in either, and under US GAAP it must be in operating.

Key differences between IFRS and US GAAP for cash flow classification:

• Interest paid: IFRS (operating or financing) vs. US GAAP (operating only)
• Interest received: IFRS (operating or investing) vs. US GAAP (operating only)
• Dividends paid: IFRS (operating or financing) vs. US GAAP (financing only)
• Dividends received: IFRS (operating or investing) vs. US GAAP (operating only)