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IFRS Information to be included in the notes to the interim financial statements

IFRS Information to be included in the notes to the interim financial statements

IFRS Information to be included in the notes to the interim financial statements: The International Financial Reporting Standards, usually called the IFRS Standards,are standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB) to provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. They are a consequence of growing international shareholding and trade and are particularly important for companies that have dealings in several countries. They are progressively replacing the many different national accounting standards. They are the rules to be followed by accountants to maintain books of accounts which are comparable, understandable, reliable and relevant as per the users internal or external. IFRS, with the exception of IAS 29 Financial Reporting in Hyperinflationary Economies and IFRIC 7 Applying the Restatement Approach under IAS 29, are authorized in terms of the historical cost paradigm. IAS 29 and IFRIC 7 are authorized in terms of the units of constant purchasing power paradigm.

IFRS Information to be included in the notes to the interim financial statements

IFRS began as an attempt to harmonize accounting across the European Union but the value of harmonization quickly made the concept attractive around the world. However, it has been debated whether or not de facto harmonization has occurred. Standards that were issued by IASC (the predecessor of IASB) are still within use today and go by the name International Accounting Standards (IAS), while standards issued by IASB are called IFRS. IAS were issued between 1973 and 2001 by the Board of the International Accounting Standards Committee (IASC). On 1 April 2001, the new International Accounting Standards Board (IASB) took over from the IASC the responsibility for setting International Accounting Standards. During its first meeting the new Board adopted existing IAS and Standing Interpretations Committee standards (SICs). The IASB has continued to develop standards calling the new standards “International Financial Reporting Standards”.

IFRS Information to be included in the notes to the interim financial statements

Financial statements are a structured representation of the financial positions and financial performance of an entity. The objective of financial statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions. Financial statements also show the results of the management’s stewardship of the resources entrusted to it.

To meet this objective, financial statements provide information about an entity’s:

  1. Assets;
  2. liabilities;
  3. Equity;
  4. Income and expenses, including gains and losses;
  5. Contributions by and distributions to owners in their capacity as owners; and
  6. Cash flows.

This information, along with other information in the notes, assists users of financial statements in predicting the entity’s future cash flows and, in particular, their timing and certainty.

IFRS Information to be included in the notes to the interim financial statements:  Interim Financial Reporting prescribes the minimum content for an interim financial report, and the principles for recognition and measurement in complete and condensed financial statements for an interim period. The Standard has been effective since 1 January 1999, and was most recently amended as a consequential amendment of IAS 1(2007) Presentation of Financial Statements, resulting in changes in terminology, and in the titles and layout of certain of the financial statements to be included in interim financial reports.

IFRS Information to be included in the notes to the interim financial statements

These amendments are effective for periods beginning on or after 1 January 2009. IFRS 8 Operating Segments, which supersedes IAS 14 Segment Reporting and is effective for periods beginning on or after 1 January 2009, has expanded the segment information to be disclosed in interim financial reports.

IFRS Information to be included in the notes to the interim financial statements

In this guide, it is assumed that the interim accounting period under consideration begins on or after 1 January 2009 – no reference is made to the requirements of IAS 34 applicable to earlier periods. 1.1 Scope of IAS 34 IAS 34 applies to interim financial reports that are described as complying with International Financial Reporting Standards. [IAS 34.3] Interim financial reports are financial reports containing either a complete set of financial statements (as described in IAS 1) or a set of condensed financial statements (as described later in this guide) for an interim period. An interim period is a financial reporting period shorter than a full financial year

IFRS Information to be included in the notes to the interim financial statements:  No requirement to prepare interim financial reports IAS 34 does not contain any rules as to which entities should publish interim financial reports, how frequently, or how soon after the end of an interim period. The Standard notes that governments, securities regulators, stock exchanges, and accountancy bodies often require entities with publicly-traded debt or equity to publish interim financial reports, and that those regulations will generally specify the frequency and timing of such reports.

IFRS Information to be included in the notes to the interim financial statements

IAS 34 encourages publicly-traded entities:

  • To provide interim financial reports at least as of the end of the first half of their financial year.
  • To make their interim financial reports available no later than 60 days after the end of the interim period. 1.3 No requirement for interim financial reports to comply with IAS 34 Each financial report, annual or interim, is evaluated on a stand-alone basis for compliance with IFRSs.

It is important to note that entities that prepare annual financial statements in accordance with IFRSs are not precluded from preparing interim financial reports that do not comply with IFRSs, provided that the interim report does not state that it is IFRS-compliant.

The fact that an entity has not published interim financial reports during a financial year, or that it has published interim financial reports that do not comply with IAS 34, does not prevent the entity’s annual financial statements from conforming to IFRSs, if they are otherwise IFRS-compliant.

IFRS Information to be included in the notes to the interim financial statements

Includes IFRSs with an effective date after 1 January 2014 but not the IFRSs they will replace. This extract has been prepared by IFRS Foundation staff and has not been approved by the IASB. For the requirements reference must be made to

International Financial Reporting Standards. 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 entity’s capacity to generate earnings and cash flows and its financial condition and liquidity. This Standard applies if an entity is required or elects to publish an interim financial report in accordance with International Financial Reporting Standards.

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. Interim period is a financial reporting period shorter than a full financial year. 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. Nothing in this Standard is intended to prohibit or discourage an entity from publishing a complete set of financial statements (as described in IAS 1) in its interim financial report, rather than condensed financial statements and selected explanatory notes.

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 IAS 1 for a complete set of financial statements. An interim financial report shall include, at a minimum, the following components:

  1. Condensed statement of financial positionm
  2. Condensed statement of comprehensive income, presented as either
    1. A condensed single statement.
    2. A condensed separate income statement and a condensed statement of comprehensive income.
  3. Condensed statement of changes in equity.
  4. Condensed statement of cash flows.
  5. Selected explanatory notes.

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.

IFRS Information to be included in the notes to the interim financial statements: In deciding how to recognise, measure, classify, or disclose an item for interim financial reporting purposes, materiality shall be assessed in relation to the interim period financial data. In making assessments of materiality, it shall be recognised that interim measurements may rely on estimates to a greater extent than measurements of annual financial data. 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.

IFRS Information to be included in the notes to the interim financial statements- To achieve that objective, measurements for interim reporting purposes shall be made on a year-to-date basis. The measurement procedures to be followed in an interim financial report shall be designed to ensure that the resulting information is reliable and that all material financial information that is relevant to an understanding of the financial position or performance of the entity is appropriately disclosed. While measurements in both annual and interim financial reports are often based on reasonable estimates, the preparation of interim financial reports generally will require a greater use of estimation methods than annual financial reports.

IFRS Information to be included in the notes to the interim financial statements

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