Final answer:
In the statement of cash flows under IFRS, interest paid can be categorized either as an operating cash flow or a financing cash flow, reflecting the different ways in which a firm may engage in financial capital transactions.
Step-by-step explanation:
The question you're asking pertains to the classification of interest paid in the statement of cash flows under International Financial Reporting Standards (IFRS). Specifically, when it comes to interest paid, IFRS allows for flexibility in how it can be reported: it can be classified as an operating cash flow or as a financing cash flow. This means that the correct answer to your question is c) Can be classified as either an operating cash flow or a financing cash flow.
This flexibility in classification recognizes that interest paid can sometimes be considered part of the day-to-day operating activities of a business, while in other contexts it may be more appropriate to consider it as part of financing activities. This is because the interest payment is directly linked to the method chosen by a firm to access financial capital—whether through borrowing from a bank, issuing bonds, or other financing methods.