IAS 7 vs ASC 230
- Indirect method dominates under both; IAS 7 allows direct.
- Interest paid: IAS 7 allows operating or financing; ASC 230 forces operating.
- Interest received: IAS 7 allows operating or investing; ASC 230 operating.
- Dividends paid: IAS 7 allows operating or financing; ASC 230 financing.
IFRS 16 lease treatment
Under IFRS 16 there is no operating-lease classification for lessees; all leases produce a ROU asset and lease liability. Principal payments sit in financing (cash outflows); interest portion can sit in operating or financing per the accounting policy choice. The FCF walk should subtract financing-section lease principal for lease-heavy UK filers (retailers, hospitality).
UK corporation tax
Main rate 25% for FY26; small-profits rate 19% for taxable profits under £50,000 with marginal relief between £50,000 and £250,000. Source: HMRC[HMRC]. Use 25% as the FCFF tax-shield rate for large UK filers; effective rate may be lower with R&D credits.
Finding the IFRS cash flow statement
For UK-listed companies on the LSE, annual reports are filed via the Regulatory News Service and at Companies House. The cash flow statement follows the income statement and balance sheet; line labels under IFRS often differ from US GAAP ("Cash generated from operations" precedes the OCF subtotal).