What are the implications for consolidate reporting of changing the fiscal year from 31Dec to 31Mar?

Question

We want to change the fiscal year from 31MAr to 31Dec.

Do I need to prepare the next financial statement for 15 months? What about comparability?

Answer 1

If you have already prepared financial statements for 31/03/2016, then you can prepare 09 months financial statements as at 31/12/2016 for the start. However note IAS 1 requirements on change of reporting period:

"An entity shall present a complete set of financial statements (including comparative information) at least annually. When an entity changes the end of its reporting period and presents financial statements for a period
longer or shorter than one year, an entity shall disclose, in addition to the period covered by the financial statements:
(a) the reason for using a longer or shorter period, and
(b) the fact that amounts presented in the financial statements are not entirely comparable."

Comments

So only disclosure will be required regarding:

(a) the reason for using a longer or shorter period, and
(b) the fact that amounts presented in the financial statements are not entirely comparable?

I prepared FS as at 31/12/2015 and now we want to change to 31/03 so I will prepare next FS as at 31/03/2017 so there will be 15 months difference.

Answer 2

If an entity wants to change its fiscal year from 31Mar to 31 December, then an entity has to make the following adjustments according to IFRS1 to make the financial statements comparable.

1. The entity is required to prepare two set of financial statements including two statements of profit and loss, two statements of financial position, two statements of cash flows, and two statements of changes in equity. The period for the first set of financial statements must be of  9 months ie from 31 Mar to 31 December and then for 12 months in the upcoming year.

Moreover, the entity has to disclose that:

• The reason for the change in the fiscal year.
• The financial statements are not completely comparable.