Operating vs non- operating exp
sonam (STUDENT) (36 Points)
11 February 2021
Whether interest paid on unsecured loans is operating or non-operating expense?
2 Replies
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 12 February 2021
Everythin* is classified as a finance cost. It depends how you can classify it for yourself that is if the loan was to fund working capital or investments
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 13 February 2021
R u bcom or ca? I just now remembered it’s cash flows which segregates interest in different sections
operating cash flows- Interest expense from working capital, Interest payable on dividends (financial institutions)
investing activities- interest payable to joint venture or an associate will be recorded here
finance activity- Interest on dividends for other entities
i hope you got the gist of it. All the above interest expenses are reported as finance costs.
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