Objective
The objective of this Standard is to prescribe the minimum content of an interim financial report and to prescribe 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 entityβs capacity to generate earnings and cash flows and its financial condition and liquidity.
Scope
This Standard does not mandate which entities should be required to publish interim financial reports, how frequently, or how soon after the end of an interim period. However, governments, securities regulators, stock exchanges, and accountancy bodies often require entities whose debt or equity securities are publicly traded to publish interim financial reports. This Standard applies if an entity is required or elects to publish an interim financial report in accordance with International Financial Reporting Standards (IFRSs). The International Accounting Standards Committee1 encourages publicly traded entities to provide interim financial reports that conform to the recognition, measurement, and disclosure principles set out in this Standard. Specifically, publicly traded entities are encouraged:
- to provide interim financial reports at least as of the end of the first half of their financial year; and
- to make their interim financial reports available not later than 60 days after the end of the interim period.
Definitions
Interim period is a financial reporting period shorter than a full financial year
Interim financial report means a financial report containing either a complete set of financial statements (as described in IAS 1 Presentation of Financial Statements (as revised in 2007)) or a set of condensed financial statements (as described in this Standard) for an interim period.
Recognition and measurement
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 entityβs 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.
Disclosures
In addition to disclosing significant events and transactions in accordance with paragraphs 15β15C, an entity shall include the following information, in the notes to its interim financial statements or elsewhere in the interim financial report. The following disclosures shall be given either in the interim financial statements or incorporated by cross-reference from the interim financial statements to some other statement (such as management commentary or risk report) that is available to users of the financial statements on the same terms as the interim financial statements and at the same time. If users of the financial statements do not have access to the information incorporated by cross-reference on the same terms and at the same time, the interim financial report is incomplete. The information shall normally be reported on a financial year-to-date basis.
- a statement that the same accounting policies and methods of computation are followed in the interim financial statements as compared with the most recent annual financial statements or, if those policies or methods have been changed, a description of the nature and effect of the change.
- explanatory comments about the seasonality or cyclicality of interim operations.
- the nature and amount of items affecting assets, liabilities, equity, net income or cash flows that are unusual because of their nature, size or incidence.
- the nature and amount of changes in estimates of amounts reported in prior interim periods of the current financial year or changes in estimates of amounts reported in prior financial years.
- issues, repurchases and repayments of debt and equity securities.
- dividends paid (aggregate or per share) separately for ordinary shares and other shares.
- the following segment information (disclosure of segment information is required in an entityβs interim financial report only if IFRS 8 Operating Segments requires that entity to disclose segment information in its annual financial statements):
- revenues from external customers, if included in the measure of segment profit or loss reviewed by the chief operating decision maker or otherwise regularly provided to the chief operating decision maker.
- intersegment revenues, if included in the measure of segment profit or loss reviewed by the chief operating decision maker or otherwise regularly provided to the chief operating decision maker.
- a measure of segment profit or loss.
- a measure of total assets and liabilities for a particular reportable segment if such amounts are regularly provided to the chief operating decision maker and if there has been a material change from the amount disclosed in the last annual financial statements for that reportable segment.
- a description of differences from the last annual financial statements in the basis of segmentation or in the basis of measurement of segment profit or loss.
- a reconciliation of the total of the reportable segmentsβ measures of profit or loss to the entityβs profit or loss before tax expense (tax income) and discontinued operations. However, if an entity allocates to reportable segments items such as tax expense (tax income), the entity may reconcile the total of the segmentsβ measures of profit or loss to profit or loss after those items. Material reconciling items shall be separately identified and described in that reconciliation.
8. events after the interim period that have not been reflected in the financial statements for the interim period.
9. the effect of changes in the composition of the entity during the interim period, including business combinations, obtaining or losing control of subsidiaries and long-term investments, restructurings, and discontinued operations. In the case of business combinations, the entity shall disclose the information required by IFRS 3 Business Combinations
10. for financial instruments, the disclosures about fair value required by paragraphs 91β93(h), 94β96, 98 and 99 of IFRS 13 Fair Value Measurement and paragraphs 25, 26 and 28β30 of IFRS 7 Financial Instruments: Disclosures.
11. for entities becoming, or ceasing to be, investment entities, as defined in IFRS 10 Consolidated Financial Statements, the disclosures in IFRS 12 Disclosure of Interests in Other Entities paragraph 9B.
12. the disaggregation of revenue from contracts with customers required by paragraphs 114β115 of IFRS 15 Revenue from Contracts with Customers.
If an entityβs 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 IFRSs unless it complies with all the requirements of IFRSs.
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.