Introduction to IAS 34 - Interim Financial Reporting

1 This Standard (IAS 34) addresses interim financial reporting, a matter not covered in a prior Standard. IAS 34 is effective for accounting periods beginning on or after 1 January 1999.

2 An interim financial report is a financial report that contains either a complete or condensed set of financial statements for a period shorter than an entity’s full financial year.

3 This Standard does not mandate which entities should publish interim financial reports, how frequently, or how soon after the end of an interim period. In IASC’s judgement, those matters should be decided by national governments, securities regulators, stock exchanges, and accountancy bodies. This Standard applies if a company is required or elects to publish an interim financial report in accordance with Standards.

4 This Standard:

(a) defines the minimum content of an interim financial report, including disclosures; and

(b) identifies the accounting recognition and measurement principles that should be applied in an interim financial report.

5 The minimum content of an interim financial report is a condensed statement of financial position, a condensed statement or statements of profit or loss and other comprehensive income, a condensed statement of cash flows, a condensed statement of changes in equity, and selected explanatory notes. If an entity presents the items of profit or loss in a separate statement as described in paragraph 10A of IAS 1 Presentation of Financial Statements (as amended in 2011), it presents interim condensed information from that statement.

6 On the presumption that anyone who reads an entity’s interim report will also have access to its most recent annual report, virtually none of the notes to the annual financial statements are repeated or updated in the interim report. Instead, the interim notes include primarily an explanation of the events and changes 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.

7 An entity should apply the same accounting policies in its interim financial report as are applied in its annual financial statements, except for accounting policy changes made after the date of the most recent annual financial statements that are to be reflected in the next annual financial statements. The frequency of an entity’s reporting—annual, half-yearly, or quarterly—should not affect the measurement of its annual results. To achieve that objective, measurements for interim reporting purposes are made on a year-to-date basis.

8 Part B of the illustrative examples accompanying the Standard provides guidance for applying the basic recognition and measurement principles at interim dates to various types of asset, liability, income, and expense. Income tax expense for an interim period is based on an estimated average annual effective income tax rate, consistent with the annual assessment of taxes.

9 In deciding how to recognise, classify, or disclose an item for interim financial reporting purposes, materiality is to be assessed in relation to the interim period financial data, not forecast annual data.