http://www.accountantnorwalk.com/what-is-the-difference-between-cash-flow-from-operating-activities-and-cash-flows-from-fiancing-activities/ A Norwalk Accountant Group Sun, 11 Apr 2010 17:39:16 +0000 hourly 1 http://wordpress.org/?v= http://www.accountantnorwalk.com/what-is-the-difference-between-cash-flow-from-operating-activities-and-cash-flows-from-fiancing-activities/comment-page-1/#comment-248 El C Mon, 26 Oct 2009 16:01:03 +0000 http://www.accountantnorwalk.com/what-is-the-difference-between-cash-flow-from-operating-activities-and-cash-flows-from-fiancing-activities/#comment-248 I know, this can be confusing, and sometimes, there is no easy answer. It depends on the management's cash management strategy. A single transaction may include cash flows that are classified differently. For example, when the cash repayment of a loan includes both interest and principal, the interest element may be classified as an operating activity and the principal element is classified as a financing activity. Usually, however, interest on short term payables, e.g. on accounts payable, is treated as operating, whilst interest on long-term borrowings like mortgages and bonds is treated as financing. I know, this can be confusing, and sometimes, there is no easy answer. It depends on the management’s cash management strategy. A single transaction may include cash flows that are classified differently. For example, when the cash repayment of a loan includes both interest and principal, the interest element may be classified as an operating activity and the principal element is classified as a financing activity.
Usually, however, interest on short term payables, e.g. on accounts payable, is treated as operating, whilst interest on long-term borrowings like mortgages and bonds is treated as financing.

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