Siemens AG is Europe’s largest conglomerate. It is headquartered in Berlin and Munich. The amounts that follow are in millions of euros (€). The company’s statement of cash flows for the year ending September 30, 2011, uses the indirect method of calculating cash flow from operations. It begins with €7,011 of income from continuing operations, adds back depreciation, and makes other adjustments to income that would be familiar. However, Siemens reports under IFRS and therefore its statements contain a few unusual items. In the operating section there is a deduction of €491, which removes the net interest income from operating income.
The Consolidated Statements of Income show interest income of €2,207 and interest expense of (€1,716), which nets to €491. In the operating section of the Statement of Cash Flows there is an addition for interest received (€787), and in the Financing section there is a deduction for interest paid (€475). What item(s) in this statement would be shown differently if Siemens reported using U.S. GAAP? Why is the interest expense amount different than the interest paid amount?

  • CreatedFebruary 20, 2015
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