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INTERIM FINANCIAL

REPORTING (PAS 34)


Definition
Interim financial reports are financial statements
covering periods of less than a full fiscal year.

The purpose of an interim financial report is to provide


financial statement users with more timely information
for making investment and credit decisions.

Additionally, interim reports can yield significant


information concerning trends affecting the business
and seasonality effects, both of which could be obscured
in annual reports.
Definition

Interim financial reports should comply with PFRS in


the recognition, measurement and disclosure
requirements set out in the standards.
Frequency of Interim
Reporting

PAS 34 does not mandate which entities are


required to publish interim financial reports, how
frequently, or how soon after the end of interim
reporting.
Philippine Jurisdiction

SEC and PSE (reportorial requirements of the Revised


Securities Act) - file quarterly interim financial reports within
45 days after the end of each of the first three quarters.
SEC (Rules on Commercial Papers and Financing Act) file
quarterly financial reports within 45 days after each end
quarter.
CHAPTER V
Reportorial Requirements

SEC. 17. Periodic and Other Reports of Issuers. -17.1. Every issuer
satisfying the requirements in Subsection 17.2 hereof shall file with the
Commission:chanroblesvirtualawlibrary

(a) Within one hundred thirty-five (135) days, after the end of the issuers
fiscal year, or such other time as the Commission may prescribe, an annual
report which shall include, among others, a balance sheet, profit and loss
statement and statement of cash flows, for such last fiscal year, certified by
an independent certified public accountant, and a management discussion
and analysis of results of operations; and

(b) Such other periodical reports for interim fiscal periods and current
reports on significant developments of the issuer as the Commission may
prescribe as necessary to keep current information on the operation of the
business and financial condition of the issuer.
2 Views

Integral- This view directs that annual operating expenses


are to be estimated and then allocated to the interim periods
based on forecasted annual activity levels, such as expected
sales volume. When this approach is employed, the results
of subsequent interim periods must be adjusted to reflect
prior estimation errors.
2 Views
Independent- Each interim period is considered to be a
discrete accounting period, with status equal to a fiscal
year.
no estimations or allocations that are different from those
used for annual reporting are to be made for interim
reporting purposes.
The same expense recognition rules should apply as under
annual reporting, and no special interim accruals or
deferrals are to be permitted. Annual operating expenses
are recognized in the interim period in which they are
incurred, irrespective of the number of interim periods
benefited, unless deferral or accrual would be called for in
the annual financial statements
Which view to follow?

PAS 34 does not mention about the


two views.
Adopts a mix of the two.
Minimum Components of an Interim
Financial Report
An interim financial report should include
-condensed statement of financial position
-condensed statement of comprehensive
income
- condensed statement of changes in equity
-condensed cash flow statement
- selected explanatory notes
Minimum Components of an Interim
Financial Report
Condensed- each of the headings
and subtotals presented in the
entitys most recent annual
financial statements is required but
there is no requirement to include
greater details unless specifically
required.
Minimum Components of an Interim
Financial Report

PAS 34 does not prohibit and entity to publish a complete


set of financial statements.
Selected Explanatory
Notes
IAS 34 reiterates that it is superfluous to provide the same notes
in the interim financial report that appeared in the most recent
annual financial statements, since financial statement users have
access to those statements in all likelihood.

To the contrary, at an interim date it would be meaningful to


provide an explanation of events and transactions that are
significant to an understanding of the changes in financial
position and performance of the entity since the last annual
reporting.
Selected Explanatory
Notes
Examples of disclosures required:
Writedown of inventories to NRV and reversal of writedown
Recognition of loss from impairment and reversal of impairment
loss
Acquisition and disposal of items of PPE
Commitments for purchase of PPE
Litigation Settlements
Correction of prior period errors
Form & Content of an
Interim Financial
Statement
IAS 34 mandates that if an entity chooses to
present the complete set of (interim) financial
statements instead of opting for the allowed
method of presenting only condensed interim
financial statements, then the form and content of
those statements should conform to the
requirements set by IAS 1 for a complete set of
financial statements.
Form & Content...
If EPS is disclosed in the annual financial
statement then the same needs to be disclosed on
the face of the interim statement of profit and
loss;
If consolidated annual financial statements are
prepared then interim consolidated statements need
to be prepared in addition to the separate financial
statements.
PROBLEM