U.S. GAAP and IFRS differ in the classifications of dividends and interest on the statement of cash

Question:

U.S. and IFRS differ in the classifications of dividends and interest on the statement of cash flows. U.S. requires firms to classify cash receipts from interest and dividends and cash payments for interest as operating cash flows. However, IFRS allows entities to report these items in any of the three categories— operating, investing, or financing. Read the basis for conclusions in FAS B’s Statement of Financial Accounting Standards No. 95, “Statement of Cash Flows,” paragraphs 88 through 90.
1. Where did certain respondents think these cash receipts and payments should be classified? What was their reasoning?
2. What was the Board’s reasoning for requiring that firms include these items in operating cash flows?
GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...