IAS 34 – Interim Financial

Reporting

Effective date 1st January

1999
 Executive Summary
 Interim financial reporting under IFRS and US
GAAP are also very similar.
 Under IFRS, each interim period is viewed as a
discrete reporting period and costs that do not
meet the definition of an asset may not be
deferred at the end of a period.
 Under US GAAP, each interim period is viewed
as an integral part of an annual period and
certain costs that may benefit other periods may
be allocated to those periods.
 Objective

The objective of IAS 34 is to prescribe the

minimum content of an interim financial report
and to prescribe the principles for recognition
and measurement in financial statements
presented for an interim period.
 Interim Reporting
General

US GAAP IFRS

Entities are required to use the same

accounting policies that were in effect in the
prior year, subject to adoption of new policies Similar
that are disclosed.

A complete set of financial statements or a

Similar
condensed set of financial statements is
allowed.
 Interim Reporting
General

US GAAP IFRS

Does not mandate which entities are required

to present interim financial information, that is
the purview of local securities regulators. For
example, US public companies must follow SEC Similar
Regulation S-X for the purpose of preparing
interim financial statements.

If reporting condensed financial statements, a

condensed balance sheet, condensed income Similar
statement, condensed cash flows statement
and certain explanatory notes are required.
 Interim Reporting
General

US GAAP IFRS

 A condensed statement of
If reporting condensed financial changes in equity is required if
statements, it is not required that a reporting condensed financial
condensed statement of changes in statements.
equity be presented.
 A condensed statement of
 If reporting condensed financial comprehensive income is
statements, a condensed statement of required.
comprehensive income is not required.
 Interim Reporting
integral versus discrete principles

US GAAP IFRS

With some exceptions, views

Views each interim period as an
each interim period as a discrete
integral part of the annual period.
period.
 Interim Reporting
Special reporting issues

US GAAP IFRS

Basic and diluted earnings per share are

presented on the face of the income Similar
statement.

Income tax expense for an interim period

is based on an estimation of the Similar
annualized effective tax rate. This is more
consistent with the integral approach.
 Interim Reporting
Special reporting issues

US GAAP IFRS

Since each interim period is viewed as an

integral part of an annual period, certain
costs that benefit more than one interim
period may be allocated among those
Under the discrete
periods, resulting in deferral or accrual of
approach, the entire expense
certain costs. For example, certain costs
related to these items would
such as bad debt expense, inventory
be included in one interim
shrinkage and executive compensation are
period.
not known until year-end.
Under the integral approach, these costs
would be allocated across all interim
periods.