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FINANCIAL ACCOUNTING AND REPORTING

INTERIM REPORTING
Key Definitions
Interim Period Is a financial reporting period shorter than a full financial year.
Interim financial report A financial report containing either a complete set of financial
statements or a set of condensed financial statements for an interim period.
Minimum Components of an Interim Financial Report
a.

Condensed statement of financial position

b.

Condensed income statement

c.

Condensed statement showing either (i) all changes in equity or (ii) changes in equity
other than those arising from capital transactions with owners and distributions to owners

d.

Condensed statement of cash flows

e.

Selected explanatory notes

Required information in Condensed Statements

a. Headings and subtotals included in most recent annual financial statements

b. Selected minimum explanatory notes - explaining events and transactions significant to an
understanding of the changes in financial position/performance since last annual reporting
date
c. Selected line items or notes if their omission would make the condensed financial
statements misleading
d. Basic and diluted earnings per share (if applicable) on the face of statement of
comprehensive income.
General Guidelines of Interim Financial Reporting
a. Revenues from products sold or services rendered are generally recognized for interim
reports on the same basis as for the annual period.
b. Expenses associated directly with revenue are matched against revenue in those
interim periods in which the related revenue is recognized.
c. Expenses not associated with revenue are recognized in the interim periods as incurred
or allocated over the interim periods benefited.
d. Inventories are measured for interim financial reporting by the same principles as at
financial year-end (LCNRV). However full inventory taking may not be required at interim
dates although it must be done at financial year-end. It may be sufficient to make
estimates at interim dates based on sales margin.
e. Inventory losses from permanent market declines are recognized in the interim period in
which the decline occurs. Recoveries of such losses on the same inventory in later interim
period should be recognized as gains in later interim periods.
f.

Temporary market declines on inventories and recoveries at a later interim period are now
recognized for interim purposes.

g. Interim period income tax expense should reflect the same general principles of income
tax accounting applicable to annual reporting.

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h. Gains or losses from, disposal of property, gains or losses from sale of discontinued
operations and other gains and losses should not be allocated over the interim periods.
Other Guidelines
Accounting Policies
Principles for recognizing assets, liabilities, income and expenses are same as in the most
recent annual financial statements, unless there is a change in an accounting policy that is
to be reflected in the next annual financial statements.
Tax recognised based on weighted average annual income tax rate expected for the full
year
Tax rate changes during the year are adjusted in the subsequent interim period during the
year.
USE OF ESTIMATES - Interim reports require a greater use of estimates than annual reports.
COSTS INCURRED UNEVENLY - Anticipated or deferred only if it would be possible to defer or
anticipate at yearend.
SEASONAL, CYCLICAL OR OCCASIONAL REVENUE
Revenue received during the year should not be anticipated or deferred where anticipation
would not be appropriate at year end
Recognized as it occurs.
Periods to be presented
Statement of financial position as at the end of the current interim period (e.g. 30 Sept.
2016) and as of the end of the immediate preceding financial year (e.g. 31 December 2015)
Statements of comprehensive income for the current interim period (e.g. July Sept. 2016)
and cumulatively for the current financial year (Jan. Sept. 2016) (which will be the same
for half year ends), with comparatives for the interim period of the preceding financial year
(Jan. Sept. 2015)
Statements of changes in equity for the current financial year to date, with comparatives for
the year to date of the immediately preceding financial year
Statements of cash flows for the current financial year to date, with comparatives for the
year to date of the immediately preceding financial year.

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