CONFRAS

INTERIM FINANCIAL
REPORTING
 Interim financial reporting is the
preparation and presentation of financial
statements for a period of less than one
year.

IAS 34.4
 Interim financial reporting is the
preparation and presentation of financial
statements for a period of less than one
year.

IAS 34.4
2 R E G U L AT I O N S
PAS 3 4

SEC & PSE

PAS
ENCOURAGES
34

SEC
& REQUIRES

PSE
PAS
At least
34 semi-annually

SEC
& Quarterly
PSE
PAS Not later than 60
days after the end of
34
the interim period.

SEC
Within 45 days after
& the end of the first
PSE three quarters.
2 TYPES OF
P R E S E N TAT I O N S
CONDENSED
FINANCIAL
STAT E M E N T S
A COMPLETE SET OF
FINANCIAL
STAT E M E N T S
CONDENSED
FINANCIAL
STAT E M E N T S
A COMPLETE SET OF
FINANCIAL
STAT E M E N T S
CONDENSED
FINANCIAL
STAT E M E N T S
A COMPLETE SET OF
FINANCIAL
STAT E M E N T S
T WO V I E WS O N I N T E R I M
FINANCIAL REPORTING
 I N T E G RAL

INDEPENDENT
I N T E G RAL

Each interim period is an integral part of

the annual period.
There is a need for estimation and
allocation.
I N T E G RAL

Each interim period is an integral part of

the annual period.
There is a need for estimation and
allocation.
ILLUSTRATIVE PROBLEM 1

Kit Co. has an estimated depreciation expense for the year December 31,
2019 amounting to P120,000 and that year-end bonuses to employees will
total P500,000. In the interim income statement for six months ended
June 30 2019, what total amount of these expenses should be reported?

P310,000
In applying the integral view, there is a need to estimation and allocation for
items.
 I N T E G RAL

INDEPENDENT
INDEPENDENT

Each interim period is treated as a discrete

or separate accounting period with status
equal to a fiscal year.

No allocations and estimations.

INDEPENDENT

Each interim period is treated as a discrete

or separate accounting period with status
equal to a fiscal year.

No allocations and estimations.

ILLUSTRATIVE PROBLEM 2

Raymund Co. incurred an inventory loss from market decline of

P840,000 on June 30, 2019. This is expected to reverse in the next
semester. What amount of the inventory loss should be recognized in the
quarterly income statement for the three months ended June 30, 2019?

P840,000
PAS 34 provides that inventories are measured for interim financial reporting by the same
principles as at financial year-end. Losses on inventory write-downs are recognized regardless
of whether the write-down is temporary (expected to be reversed) or non-temporary.
WHICH VIEW IS
FAVO R E D BY T H E
PHILIPPINES?
ILLUSTRATIVE PROBLEM 3

Kevin Co. paid property taxes of P180,000 on a factory building for

calendar year 2019. On April 1, 2019, the entity made P300,000 in
unanticipated ordinary repairs to plant equipment. What total amount
these expenses should be included in the quarterly income statement
ending June 30, 2019?

P345,000
Property taxes benefit an entire year, hence, allocation of the entire
property tax paid is proper.

An application of the independent approach. Seasonal, cyclical, occasional, or irregular

costs such as an unanticipated repair shall not be anticipated nor allocated.
ILLUSTRATIVE PROBLEM 4

Abet Corp., a calendar-year entity, has the following income before tax
provision and effective annual tax rate for the first three quarters of the
current year 2020:

INCOME BEFORE E F F E C T I V E TA X
SEGMENT
TA X R AT E

1 ST QUA R T E R ₱ 6,000,000.00 30%

2 N D QUA R T E R ₱ 7,000,000.00 30%

3 R D QUA R T E R ₱ 7,500,000.00 32%

 INCOME E F F E CT IVE I N C O M E TA X
B E F O R E TA X TA X R AT E EXPENSE

1 S T QUA R T E R ₱ 6,000,000.00 30% ₱ 1,800,000.00

 INCOME E F F E CT IVE I N C O M E TA X
B E F O R E TA X TA X R AT E EXPENSE

1 ST A N D 2 N D
₱ 13,000,000.00 30% ₱ 3,900,000.00
QUA R T E R

PAY M E N T F O R 1 ST
₱ (1,800,000.00)
QUA R T E R

I N C O M E TA X E X P E N S E
₱ 2,100,000.00
2 N D QUA R T E R
 INCOME E F F E CT IVE I N C O M E TA X
B E F O R E TA X TA X R AT E EXPENSE
1 ST ; 2 N D ; A N D 3 R D
₱ 20,500,000.00 32% ₱ 6,560,000.00
QUA R T E R
PAY M E N T F O R 1 ST
₱ (1,800,000.00)
QUA R T E R

PAY M E N T F O R 2 N D
₱ (2,100,000.00)
QUA R T E R

I N C O M E TA X E X P E N S E
₱ 2,660,000.00
3 R D QUA R T E R
END.