For purposes of the statement of cash flows, under IFRS interest paid is treated as:

1. an operating activity in all cases.
2. an investing or operating activity, depending on use of the borrowed funds.
3. either a financing or investing activity.
4. either an operating or financing activity, but treated consistently from period to period.

A set of internationally standardized accounting and financial reporting guidelines known as IFRS are used to prepare and display financial statements. Ensures that accounting procedures are uniform, producing comparable financial records among different reporting entities worldwide.

Interest and dividends are either financing or operational cash operations. A financial institution will frequently incorporate interest payments, instalments, and profit payments in operating cash flows.

Option a) Many businesses report cash flows incorporating paid interest and collected. Others classify interest paid as financing cash flow and interest received as cash flow for investing.

Option b) It cannot be reported under investing activities, as it is not related to the sale or purchase of fixed assets or investments. .

Option c) Interest paid is either reported as operating activity or the financing activity, depending upon the nature of the business.