Indian Accounting Standard (Ind AS) 34 : Interim Financial Reporting
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 entitys capacity to generate earnings and cash flows and its financial condition and liquidity.
1. 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 reports1. This Standard applies if an entity is required or elects to publish an interim financial report in accordance with Indian Accounting Standards. [Refer to Appendix 1]
2. Each financial report, annual or interim, is evaluated on its own for conformity to Indian Accounting Standards. The fact that 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 entitys annual financial statements from conforming to Indian Accounting Standards if they otherwise do so.
Unaudited Financial Results required to be prepared and presented under Clause 41 of Listing Agreement with stock exchanges is not an Interim Financial Report as defined in paragraph 4 of this Standard
3. If an entitys interim financial report is described as complying with Indian Accounting Standards, it must comply with all of the requirements of this Standard. Paragraph 19 requires certain disclosures in that regard.
4. The following terms are used in this Standard with the meanings specified:
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 Ind AS 1 Presentation of Financial Statements or a set of condensed financial statements (as described in this Standard) for an interim period.
Content of an interim financial report
5. Ind AS 1 defines a complete set of financial statements as including the following components:
(a) a balance sheet as at the end of the period (including statement of changes in equity for the period which is presented as a part of the balance sheet);
(b) a statement of profit and loss for the period;
(c) [Refer to Appendix 1]
(d) a statement of cash flows for the period;
(e) notes, comprising a summary of significant accounting policies and other explanatory information; and
(f) a balance sheet as at the beginning of the earliest comparative period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements.
6. In the interest of timeliness and cost considerations and to avoid repetition of information previously reported, an entity may be required to or may elect to provide less information at interim dates as compared with its annual financial statements. 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. Accordingly, it focuses on new activities, events, and circumstances and does not duplicate information previously reported.
7. Nothing in this Standard is intended to prohibit or discourage an entity from publishing a complete set of financial statements (as described in Ind AS 1) in its interim financial report, rather than condensed financial statements and selected explanatory notes. Nor does this Standard prohibit or discourage an entity from including in condensed interim financial statements more than the minimum line items or selected explanatory notes as set out in this Standard. The recognition and measurement guidance in this Standard applies also to complete financial statements for an interim period, and such statements would include all of the disclosures required by this Standard (particularly the selected note disclosures in paragraph 16) as well as those required by other Indian Accounting Standards.
Minimum components of an interim financial report
8. An interim financial report shall include, at a minimum, the following components:
(a) a condensed balance sheet (including condensed statement of changes in equity for the period which is presented as a part of the balance sheet);
(b) a condensed statement of profit and loss,;
(c) [Refer to Appendix 1];
(d) a condensed statement of cash flows; and
(e) selected explanatory notes.
8A [Refer to Appendix 1]
Form and content of interim financial statements
9. If an entity publishes a complete set of financial statements in its interim financial report, the form and content of those statements shall conform to the requirements of Ind AS 1 for a complete set of financial statements.
10. If an entity publishes a set of condensed financial statements in its interim financial report, those condensed statements shall include, at a minimum, each of the headings and subtotals that were included in its most recent annual financial statements and the selected explanatory notes as required by this Standard. Additional line items or notes shall be included if their omission would make the condensed interim financial statements misleading.
11. In the statement that presents the components of profit or loss for an interim period, an entity shall present basic and diluted earnings per share for that period when the entity is within the scope of Ind AS 33 Earnings per Share.
11A (Refer to Appendix 1)
12. [Refer to Appendix 1]
13. [Refer to Appendix 1]
14. An interim financial report is prepared on a consolidated basis if the entitys most recent annual financial statements were consolidated statements. The parents separate financial statements are not consistent or comparable with the consolidated statements in the most recent annual financial report. If an entitys annual financial report included the parents separate financial statements in addition to consolidated financial statements, this Standard neither requires nor prohibits the inclusion of the parents separate statements in the entitys interim financial report.
Significant events and transactions
15. 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 Information disclosed in relation to those events and transactions shall update the relevant information presented in the most recent annual financial report.
15A A user of an entitys interim financial report will have access to the most recent annual financial report of that entity. Therefore, it is unnecessary for the notes to an interim financial report to provide relatively insignificant updates to the information that was reported in the notes in the most recent annual financial report.
15B The following is a list of events and transactions for which disclosures would be required if they are significant: the list is not exhaustive.
(a) the write-down of inventories to net realisable value and the reversal of such a write-down
(b) 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;
(c) the reversal of any provisions for the costs of restructuring;
(d) acquisitions and disposals of items of property, plant and equipment;
(e) commitments for the purchase of property, plant and equipment;
(f) litigation settlements;
(g) corrections of prior period errors;
(h) changes in the business or economic circumstances that affect the fair value of the entitys financial assets and financial liabilities, whether those assets or liabilities are recognised at fair value or amortised cost;
(i) any loan default or breach of a loan agreement that has not been remedied on or before the end of the reporting period; and
(j) related party transactions.;
(k) transfers between levels of the fair value hierarchy used in measuring the fair value of financial instruments;
(l) changes in the classification of financial assets as a result of a change in the purpose or use of those assets; and
(m) changes in contingent liabilities or contingent assets.
15C Individual Indian Accounting Standards provide guidance regarding disclosure requirements for many of the items listed in paragraph 15B. When an event or transaction is significant to an understanding of the changes in an entitys financial position or performance since the last annual reporting period, its interim financial report should provide an explanation of and an update to the relevant information included in the financial statements of the last annual reporting period.
16. [Refer to Appendix 1]
16A In addition to disclosing significant events and transactions in accordance with paragraphs 1515C, an entity shall include the following information, in the notes to its interim financial statements, if not disclosed elsewhere in the interim financial report. The information shall normally be reported on a financial year-to-date basis.
(a) 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...
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