BC210 The IASB’s decisions on the presentation of lease cash outflows are linked to the nature of the right-of-use asset and lease liability, and the presentation of expenses arising from a lease in the income statement. In the IASB’s view, it would be misleading to portray payments in one manner in the income statement and in another in the statement of cash flows.
BC211 Consequently, the IASB decided that a lessee should classify the principal portion of cash repayments of the lease liability as financing activities in the statement of cash flows and classify cash payments relating to interest consistently with other interest payments. This approach is consistent with the requirements in IAS 7 Statement of Cash Flows for cash flows relating to financial liabilities and provides comparability between interest paid on leases and interest paid on other financial liabilities. This approach also results in a lessee accounting for a lease consistently in the balance shee
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