INTERIM FINANCIAL REPORTING

 The preparation and presentation of FS for a period of less than 1 year

 May be presented monthly, quarterly, or semiannually (mostly quarterly)
 Public traded entities – encouraged to provide at least semiannually, made available not later than 60
days after end of interim period

Frequency of interim reporting

 PAS 34 does not mandate which entities are required to publish and how frequent

Philippine jurisdiction
 SEC and PSE require entities covered by the reportorial requirements of Revised Securities Act to file
QUARTERLY interim financial reports within 45 days after end of each of the first 3 quarters
 SEC also requires entities covered by Rules on Commercial Papers and Financing Act to file
QUARTERLY financial reports within 45 days after each quarter-end

Two views on interim financial reporting

1. Integral view
 Interim period is an integral part of annual accounting period
 Annual operating expenses are estimated and allocated to interim periods based on
forecasted revenue or sales volume
 Results of subsequent interim periods must be adjusted to reflect prior estimation errors
 Proponents: estimation and allocation necessary to avoid creating misleading fluctuations in
interim period income
2. Independent view
 Each interim period is considered discrete or separate accounting period with status equal
to a fiscal year
 No estimations or allocations are made, unless allowed for annual reporting
 No special interim accruals or deferrals are permitted
 Proponents: smoothing of interim results through estimation and allocation of annual
operating expenses may have undesirable effect

Components of an interim financial report

 Minimum requirement:
o Condensed SFP
o Condensed SCI
o Condensed SCE
o Condensed SCF
o Selected explanatory notes
 p. 8A: an entity can present items of PL in a separate condensed income statement
 Not intended to prohibit or discourage publishing complete set of FS
 “Condensed” – each of the headings and subtotals presented in the entity’s most recent annual FS is
required but no requirement to include greater detail unless specifically required

Disclosure of compliance with PFRS

 PAS 34, p. 10: if an entity’s interim financial report is in compliance with PFRS, such fact shall be
disclosed

Selected explanatory notes

  Designed to provide explanation of significant events and transactions arising since last annual FS
 PAS 34 assumes that FS users have an access to entity’s most recent annual report
 Examples of disclosures required in a condensed interim financial report:
o Writedown of inventories to NRV and the reversal
o Recognition of loss from impairment of PPE and IA and reversal of such
o Reversal of any provision for costs of restructuring
o Acquisitions and disposal of PPE
o Commitments for the purchase of PPE
o Litigation settlement
o Corrections of PPE in previously reported financial data
o Any debt default or any breach of debt covenant that has not been corrected subsequently
o Related party transactions

Presentation of comparative interim statements

1. SFP
a. End of current interim period
b. Comparative at end of preceding year
2. IS
a. Current interim period
b. Cumulatively for current year to date
c. Comparative for comparable interim period of preceding year
d. Comparative cumulatively for financial year to date of preceding year
3. SCI
a. Current interim period
b. Cumulatively for current year to date
c. Comparative for comparable interim period of preceding year
d. Comparative cumulatively for financial year to date of preceding year
4. SCE
a. Cumulatively for current year to date
b. Comparative for comparable year to date of preceding year
5. SCF
a. cumulatively for current year to date
b. comparative for comparable year to date of preceding year
6.