Statement of Cash Flows: Interest that is capitalised
The Exposure Draft on Annual Improvements to IFRSs 2010 -2012 cycle (ED/2012/1) published in May 2012 includes the IASB's proposal to:
- amend the requirements in paragraphs 16 and 33 of IAS 7 and
- add paragraph 33A to IAS 7.
This amendment proposes to clarify that the classification of payments of interest that is capitalised shall follow the same classification as the underlying asset into which those payments were capitalised. This modification also covers the classification of payments of interest that have been capitalised into the cost of operating assets (such as inventory), which should be classified as part of an entity's cash flows from operating activities.