Interim Financial Reporting
IFRS does not require the preparation of interim financial statements. Paragraph 36 in IAS 1 Presentation
of Financial Statements only requires that:
‘An entity shall present a complete set of financial (including comparative information at least
IAS 34 Interim Financial Reporting also does not mandate which entities are required to publish interim
financial statements, how frequently they should be produced, or how soon interim reports should be
released after each reporting date. However, the standard encourages, publicly traded entities to
provide interim financial reports at least as of the end of the first half of their financial year, no later
than 60 days after the interim reporting date.
Securities regulators, stock exchanges, and other stakeholders often require entities to publish interim
financial statements. An entity is required to apply IAS 34 if it elects (or must) prepare interim financial
statements in accordance with IFRS as a result of local legislation.
An entity that presents interim financial statements can choose to prepare them either in the format of
a complete set of financial statements or in the format of a set of condensed financial statements. For
the purposes of the presentation of interim financial statements, all paragraphs in IAS 1 apply to a
complete set of financial statements whereas only IAS 1.15 – 35 are applicable for condensed financial
statements (IAS 1.4) which cover the following general features:
- Fair presentation and compliance with IFRSs
- Going concern
- Accrual basis of accounting
- Materiality and aggregation
Preparers of condensed interim financial statements are required to present the same primary
statements as in their annual statements. However, IAS 34 does not require presentation of the same
detailed amount of information and also requires fewer disclosures to be made. The current and
comparative periods to be presented also differ from annual statements.
IAS 34.11 requires an entity to present basic and diluted earnings per share (EPS) for the interim period
when the entity is within the scope of IAS 33 Earnings per Share. Entities that present a separate income
statement (two statement approach) disclose EPS on the face of the separate income statement and not
in the statement of comprehensive income.
An interim financial report is intended to provide an update of the last annual report. IAS 34 is based on
the presumption that interim financial statements are essentially an extension of the previous annual
financial statements to which anyone who reads the entity’s interim report will also have access.
Therefore few of the notes to the annual financial statements are required to be 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.
A cross-reference is required if the disclosures are presented ‘elsewhere’ in the interim financial report,
such as in the management commentary or risk report of an entity. In those cases, that document needs
to be available to users of the financial statements on the same terms and at the same time as the
interim report itself.
An entity is required to apply the same accounting policies in its interim financial report as in its
immediately preceding annual financial statements. As an exception, 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 are required to be reflected in interim financial reports.