IAS 34 Interim Financial Reporting

IAS 34 Interim Financial Reporting

Entities whose shares are publicly traded should produce
interim financial reports

Definitions;
*Interim period
is a financial reporting period shorter than a full financial year

*Interim financial report

means a financial report containing either a complete set of FS or set of
condensed FS for an interim period

Scope
The standard does not make the preparation of interim financial reports
mandatory.

The IASB strongly recommend to governments that interim reporting

should be a requirement for companies whose equity or debt securities are
publicly traded

* An interim financial report should be produced for at least the first 6

months of their financial year

* The report should be available no later than 60 days after the end of the
interim period

* E.g. A company with a year end (Y/E) ending 31 December will prepare an
interim report for the half year to 30 June.

This report will be available before the end of August

Minimum Content of an Interim Financial Report

1. a condensed balance sheet,

2. a condensed income statement,

3. a condensed statement of changes in equity,

4. a condensed cash flow statement and

5. selected explanatory notes.

If the entity provides a complete set of FS then it should comply with IAS 1

If condensed, they should include each of the headings and sub-totals

included in the most recent annual financial statements and the
explanatory notes required by IAS 34.

Additional line-items should be included if their omission would make the

interim financial information misleading

The interim accounts are designed to provide an update so should focus on

new events and not duplicate info already reported on

Measurement
Items are measured on a year to date basis

Lets say a company produces quarterly interim accounts and in the first
quarter it writes off some inventory, but then in the next quarter it actually
sells it

In the second quarter interim accounts therefore the write down is reversed

Estimates
These will be used more heavily in interim accounts

1.Pensions
No need for an actuarial valuation. Just use the most recent and
roll it forward

2. Provisions
No need for expert guidance at the interim stage

3. Inventories
No need for a full stock count. Make an estimate based in sales
margins to get a valuation

Recognition
* Intangible Assets
If development costs do not meet the capitalisation criteria at the interim
date they should not be capitalised, even if they are expected to be reached
by the financial year end
*Tax
This should be accrued using the tax rate that would be applicable to total
expected earnings

The periods to be covered by the interim financial

statements are as follows:

- Balance sheet
as of the end of the current interim period and a comparative balance sheet
as of the end of the immediately preceding financial year;

- Income statements
for the current interim period and cumulatively for the current financial
year to date, with comparative income statements for the comparable
interim periods of the immediately preceding financial year;

- Changes in equity

cumulatively for the current financial year to date, with a comparative

statement for the comparable year-to-date period of the immediately
preceding financial year; and

- Cash flow statement

cumulatively for the current financial year to date, with a comparative
statement for the comparable year-to-date period of the immediately
preceding financial year.
If the company's business is highly seasonal, IAS 34 encourages disclosure
of financial information for the latest 12 months, and comparative
information for the prior 12-month period, in addition to the interim period
financial statements