Interim financial statements are financial statements that cover a period of less than one year. They are used to convey information about the performance of the issuing entity prior to the end of the normal reporting year, and so are closely followed by investors. The concept is most commonly applied to publicly-held companies , which must issue these statements at quarterly intervals. These entities issue three sets of interim statements per year, which are for the first, second, and third quarters. The final reporting period of the year is encompassed by the year-end financial statements, and so is not considered to be associated with interim financial statements. The interim statement concept can apply to any period, such as the last five months. Technically, the "interim" concept does not apply to the balance sheet , since this financial statement only refers to assets , liabilities , and equity as of a specific point in time, rather than over a period of time.
History of IAS 34
An interim statement is a financial report covering a period of less than one year. Interim statements are used to convey the performance of a company before the end of normal full-year financial reporting cycles. Unlike annual statements, interim statements do not have to be audited. Interim statements increase communication between companies and the public and provide investors with up-to-date information between annual reporting periods. These may also be referred to as interim reports. A quarterly report is an example of an interim statement because it is issued before year end. These include a series of condensed statements covering the company's financial position, income, cash flows, and changes in equity along with notes of explanation. The IASB also suggests that companies should follow the same guidelines in their interim statements as they use in preparing their annual reports which are audited , including the use of similar accounting methods.
IAS 34 Interim Financial Reporting applies when an entity prepares an interim financial report, without mandating when an entity should prepare such a report. Permitting less information to be reported than in annual financial statements on the basis of providing an update to those financial statements , the standard outlines the recognition, measurement and disclosure requirements for interim reports. IAS 34 was issued in June and is operative for periods beginning on or after 1 January The objective of IAS 34 is to prescribe the minimum content of an interim financial report and to prescribe the principles for recognition and measurement in financial statements presented for an interim period. Interim period: a financial reporting period shorter than a full financial year most typically a quarter or half-year. Interim financial report: a financial report that contains either a complete or condensed set of financial statements for an interim period. IAS 34 specifies the content of an interim financial report that is described as conforming to International Financial Reporting Standards. However, IAS 34 does not mandate:. Such matters will be decided by national governments, securities regulators, stock exchanges, and accountancy bodies.
A financial statement is, basically, a summary of all the financial activities of a company for a specific period. These statements are used to evaluate the good or bad performance of a business entity. Generally, most of the companies decide to prepare annual financial statements.