IND AS 34 - INTERIM FINANCIAL REPORTING

Objective: 

The objective of this standard is to prescribe 

• the minimum content of an interim financial report and 
• the principles for recognition and measurement in complete or condensed financial statements for an interim period

Timely and reliable interim financial reporting improves the ability of investors, creditors, and others to understand an entity’s capacity to generate earnings and cash flows and its financial condition and liquidity. 

1. Scope: 

• This Standard applies if an entity is required or elects to publish an interim financial report in accordance with Indian Accounting Standards 
• An entity may not have provided interim financial reports during a particular financial year or may have provided interim financial reports that do not comply with this Standard does not prevent the entity’s annual financial statements from conforming to Ind ASs if they otherwise do so.
• If an entity’s interim financial report is described as complying with Ind ASs, it must comply with all the requirements of this Standard
• Definitions: 

Interim period: is a financial reporting period shorter than a full financial year. 

Interim financial report: means a financial report containing either a condensed set of financial statements or complete set of financial statements(Ind AS 1) for an interim period.

1. Content of Interim Financial Report:

This Standard defines the minimum content of an interim financial report as including condensed financial statements and selected explanatory notes. The interim financial report is intended to provide an update on the latest complete set of annual financial statements

 

Minimum components of an interim financial report

a condensed balance sheet

a condensed statement of profit and loss 

a condensed statement of changes in equity

a condensed statement of cash flow statement

selected explanatory notes 

1.Form and content of interim financial statements

Significant Events and Transactions

An entity shall include in its interim financial report 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.

Interim  Financial

Report 

 

		To an understanding
Events and		Since the end of the
	That are significant	of  the  changes  in
Transactions		last annual reporting
		financial position and
		period
		performance

The following is a list of events and transactions for which disclosures would be required if they are significant: the list is not exhaustive. 

• the write-down of inventories to net realisable value and the reversal of such a write-down 

• recognition of a loss from the impairment of financial assets, property, plant and equipment, intangible assets, or other assets, and the reversal of such an impairment loss; 

• the reversal of any provisions for the costs of restructuring;
• acquisitions and disposals of items of property, plant and equipment;
• commitments for the purchase of property, plant and equipment;
• litigation settlements;
• corrections of prior period errors 

• changes in the business or economic circumstances that affect the fair value of the entity’s financial assets and financial liabilities, whether those assets or liabilities are recognised at fair value or a mortised cost; 

• any loan default or breach of a loan agreement that has not been remedied on or before the end of the reporting period; and 

• related party transactions.; 

• transfers between levels of the fair value hierarchy used in measuring the fair value of financial instruments; 

• changes in the classification of financial assets as a result of a change in the purpose or use of those assets; and 

• changes in contingent liabilities or contingent assets

 

 

3. Periods for which interim financial statements are required to be presented

 

• balance sheet as of the end of the current interim period and a comparative balance sheet as of the end of the immediately preceding financial year. 

• statements of profit and loss for the current interim period and cumulatively for the current financial year to date, with comparative statements of profit and loss for the comparable interim periods (current and year-to-date) of the immediately preceding financial year. 
• statement of changes in equity cumulatively for the current financial year to date, with a comparative statement for the comparable year-to-date period of the immediately preceding financial year.
• statement of cash flows cumulatively for the current financial year to date, with a comparative statement for the comparable year-to-date period of the immediately preceding financial year. 

For an entity whose business is highly seasonal, financial information for the twelve months up to the end of the interim period and comparative information for the prior twelve-month period may be useful. Accordingly, entities whose business is highly seasonal are encouraged to consider reporting such information in addition to the information called

 

4. Materiality

In deciding how to recognise, measure, classify, or disclose an item for interim financial reporting purposes, materiality shall be assessed in relation to the interim period financial data. In making assessments of materiality, it shall be recognised that interim measurements may rely on estimates than measurements of annual financial data. 

While judgement is always required in assessing materiality, this Standard bases the recognition and disclosure decision on data for the interim period by itself for reasons of understandability of the interim figures. 

5. Disclosure in annual financial statements 

If an estimate of an amount reported in an interim period is changed significantly during the final interim period of the financial year but a separate financial report is not published for that final interim period, the nature and amount of that change in estimate shall be disclosed in a note to the annual financial statements for that financial year.

6. Disclosure of compliance with Ind AS

If an entity’s interim financial report is in compliance with this Standard, that fact shall be disclosed. An interim financial report shall not be described as complying with Ind ASs unless it complies with all the requirements of Ind AS

  

V.  Recognition and Measurement:
1	Same Accounting Policies		•   An entity shall apply the same accounting policies in its interim
			financial statements 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.
			•   However, the frequency of an entity’s reporting (annual, half-
			yearly, or quarterly) shall not affect the measurement of its
			annual results.
			•   To achieve that objective, measurements for interim reporting
			purposes shall be made on a year-to-date basis.
2	R e v e n u e s	r e c e i v e d	Revenues that are received seasonally, cyclically, or occasionally
	seasonally,	cyclically,  or	within a financial year shall not be anticipated or deferred as of an
	occasionally		interim date if anticipation or deferral would not be appropriate at
			the end of the entity’s financial year.
3	Costs  incurred  unevenly		Costs that are incurred unevenly within a financial year shall not be
	during the financial year		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.
4	Use of estimates		•   The measurement procedures to be followed in an interim
			financial report shall be designed to ensure that the resulting
			information  is  reliable  and  that  all  material  financial
			information that is relevant to an understanding of the
			financial position or performance of the entity is appropriately
			disclosed.
			•   While measurements in both annual and interim financial
			reports  are  often  based  on  reasonable  estimates,  the
			preparation of interim financial reports generally will require a
			greater use of estimation methods than annual financial
			reports.

 

1. Restatement of previously reported interim periods

A change in accounting policy, other than one for which the transition is specified by a new Ind AS, shall be reflected by: 

• restating the financial statements of prior interim periods of the current financial year and the comparable interim periods of any prior financial years that will be restated in the annual financial statements in accordance with Ind AS 8; or 

• when it is impracticable to determine the cumulative effect at the beginning of the financial year of applying a new accounting policy to all prior periods, adjusting the financial statements of prior interim periods of the current financial year, and comparable interim periods of prior financial years to apply the new accounting policy prospectively from the earliest date practicable.