INTERIM FINANCIAL REPORTING OBSERVATIONS

Many stakeholders, especially investors, want information on a timelier basis.

A timely and reliable financial statement improves the ability of investors, creditors,
and others to understand an entity’s capacity to generate earnings and cash flows
and its financial condition and liquidity. That is where interim statements come in;
they provide information throughout the year. Interim financial statements are
financial statements that cover a period of less than one year. The frequency of
these financial statements varies from semi-annually to quarterly to monthly.
If an annual financial statements is like a report card, interim financial
statements is are like progress reports. Different pieces of information are featured,
including current data during a fiscal year regarding financial position, results of
operations, comprehensive income, and/or cash flows. To avoid repetitiveness and
redundancy, interim financial statements should preferably focus on new activities,
events and circumstances that have occurred since the last publication of a complete
financial statement. 
The SM Prime Holdings, Inc. and Subsidiaries prepared their Unaudited
Interim Condensed Consolidated Financial (with Comparative Audited Consolidated
Balance Sheet as at December 31, 2018) for the first quarter of 2019 ended March
31, 2019. It is considered interim financial report because the preparation and
presentation of such report is for a period less than a year.

I. INTEGRAL VIEW AND INDEPENDENT VIEW

PAS 34 on interim financial reporting does not mention about the two views.
Essentially, the standard adopts a mix of the integral and independent views.
Integral View:
 Income Taxes – this account are to be accrued based on the estimated
average annual effective tax rate for the full fiscal year.
 Inventories - the same inventory costing principles should be utilized for
interim reporting as for annual reporting.
Independent View:
  Revenues - revenues such as dividend income and interest earned cannot be
anticipated or deferred at interim dates. It is recognized on the same basis as
for the annual period (as realized).
 Depreciation and Amortization – the charges to be recognized in the interim
periods are to be related to only those assets actually employed during the
period; planned acquisitions for later periods of the fiscal year are not to be
taken into account.

II. SELECTED EXPLANATORY NOTES

PAS 34 specifies that an interim financial report should contain selected
explanatory notes. However, not all of the supplementary notes in the annual
financial statements are required for interim reporting purposes, because this would
result in repetition, or the reporting of relatively insignificant changes.
 Statement of Compliance - The interim condensed consolidated financial
statements have been prepared in accordance with Philippine Accounting
Standard (PAS) 34, Interim Financial Reporting. The interim condensed
consolidated financial statements are presented in Philippine peso, which is
the Parent Companies functional and presentation currency under Philippine
Financial Reporting Standards (PFRS).
 Related Party Transaction - the significant related party transactions entered
into by the Company with SMIC, banking and retail group and other related
parties and the amounts included in the accompanying interim condensed
consolidated financial statements
 Financial Instruments - Financial Assets at FVTPL, Financial Assets at FVTPL
and Equity Instruments at FVOCI are the methods and assumptions were
used to estimate the fair value of each class of financial instrument for which it
is practicable to estimate such value.