(Summary) Ind AS 34
Interim Financial Reporting
To prescribe the minimum content of an interim financial report and to prescribe the principles for recognition and measurement in complete or condensed FS for an interim period.
This Standard applies if an entity is required or elects to publish an interim financial report in accordance with Ind AS.
Ind AS 34 does not mandate:
- Which entities should publish interim financial reports,
- How frequently, or
- How soon after the end of an interim period should the interim financial reports be published.
- Interim period
- Interim financial report
Interim period: a financial reporting period shorter than a full financial year.
Interim financial report: a financial report containing either; Complete set of FS or Set of Condensed FS.
A complete set of FS – Form and content of which should be in conformity to the requirements of Ind AS 1 OR
A condensed set of FS – Should include, at a minimum,
- Each of the headings and subtotals that were included in its most recent annual FS and
- The selected explanatory notes.
Additional line items or notes shall be included if their omission would make the condensed interim FS misleading.
The interim financial report should include 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 end of the last annual reporting period.
- Write-down of inventories
- Recognition or reversal of an impairment loss
- Reversal of provision for the costs of restructuring
- Acquisitions and disposals of PPE
- Commitments for the purchase of PPE
- Litigation settlements
- Corrections of prior period errors
- Changes in business or economic circumstances affecting the fair value of financial assets and liabilities
- Unremedied loan defaults and breaches of loan agreements
- Related party transactions
- Transfers between levels of the ‘fair value hierarchy’ or changes in the classification of financial assets
- Changes in contingent liabilities and contingent assets.
- Explanation of any seasonality or cyclicality of interim operations
- Unusual items affecting assets, liabilities, equity, net income or cash flows
- Changes in estimates
- Issues, repurchases and repayment of debt and equity securities
- Dividends paid
- Particular segment information (where Ind AS 108 applies to the entity)
- Events after the end of the reporting period
- Changes in the composition of the entity, such as business combinations, obtaining or losing control of subsidiaries, restructurings and discontinued operations
- Disclosures about the fair value of financial instruments.
In deciding how to recognize, measure & classify, or disclose an item for interim financial reporting purposes, materiality shall be assessed in relation to the interim period financial data.
If there is a significant change in an estimate made in interim period, then disclose nature and amount of that change in annual FS.
Measurements for interim reporting purposes should be made on a year-to-date basis, so that the frequency of the entity’s reporting does not affect the measurement of its annual results.
Several important measurement points:
- Income tax expense is recognised in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. Amounts accrued for income tax expense in one interim period may have to be adjusted in a subsequent interim period of that financial year if the estimate of the annual income tax rate changes.
- Revenues that are received seasonally, cyclically, or occasionally within a financial year shall not be anticipated or deferred as of an interim date if anticipation or deferral would not be appropriate at the end of the entity’s financial year.
- Costs that are incurred unevenly during an entity’s financial year shall be anticipated or deferred for interim reporting purposes if, and only if, it is also appropriate to anticipate or defer that type of cost at the end of the financial year.