The text indicates that the FASB’s rules for classifying cash flows differ in some cases from the IASB’s rules. Indicate in each case which rule you think is more appropriate.

A. The IASB allows a company to classify interest it pays on its loans as a financing cash flow. The FASB does not, and requires them to be classified as operating cash flows. (The IASB also allows the interest to be called operating.)

B. The IASB allows companies that receive dividends from stock in other companies to classify these inflows as investing cash flows. The FASB requires these receipts to be shown as operating cash flows.