TaxTMI 
TaxTMI 
Interim Financial Reporting
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....d 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 (Ind ASs). [Refer Appendix 1] 2 Each financial report, annual or interim, is evaluated on its own for conformity to Ind ASs. 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 entity's annual financial statements from conforming to Ind ASs if they otherwise do so. 3 If an entity's interim financial report is described as complying with Ind ASs, it must comply with all of the requirements of this Standard. Paragraph 19 requires certain disclosures in that regard. Definitions 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 st....
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....nents of an interim financial report 8 An interim financial report shall include, at a minimum, the following components: (a) a condensed balance sheet ; (b) a condensed statement of profit and loss; (c) a condensed statement of changes in equity; (d) a condensed statement of cash flows; and (e) selected explanatory notes. 8A [Refer 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 en....
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....ic circumstances that affect the fair value of the entity's 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; (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 Ind ASs 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 entity's 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. 16-18 [Refer Appendix 1] Other Disclosures 16A 3[ 16A In addition to disclos....
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.... to the chief operating decision maker. (iii) a measure of segment profit or loss. (iv) 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. (v) 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. (vi) a reconciliation of the total of the reportable segments' measures of profit or loss to the entity's 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 segments' measures of profit or loss to profit or loss after those items. Material reconciling items shall be separately identified and described in that reconciliation. (h) events after the interim period that have not been reflected in the financial statements for the interim period. (i) the effect of changes in the com....
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....d comparative information for the prior twelve-month period may be useful. Accordingly, entities whose business is highly seasonal are encouraged to consider reporting such information in addition to the information called for in the preceding paragraph. 22 [Refer Appendix 1] Materiality 23 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. 9[24 Ind AS 1 defines material information and requires separate disclosure of material items, including (for example) discontinued operations, and Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors requires disclosure of changes in accounting estimates, errors, and changes in accounting policies. The two Standards do not contain quantified guidance as to materiality.] 25 While judgement is always required in assessing materiality, this Standard bases the recognition and disclosure decision on data for the in....
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....hat an entity apply the same accounting policies in its interim financial statements as in its annual statements may seem to suggest that interim period measurements are made as if each interim period stands alone as an independent reporting period. However, by providing that the frequency of an entity's reporting shall not affect the measurement of its annual results, paragraph 28 acknowledges that an interim period is a part of a larger financial year. Year-to-date measurements may involve changes in estimates of amounts reported in prior interim periods of the current financial year. But the principles for recognising assets, liabilities, income, and expenses for interim periods are the same as in annual financial statements. 30 To illustrate: (a) the principles for recognising and measuring losses from inventory write-downs, restructurings, or impairments in an interim period are the same as those that an entity would follow if it prepared only annual financial statements. However, if such items are recognised and measured in one interim period and the estimate changes in a subsequent interim period of that financial year, the original estimate is changed in the subsequent i....
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....ncial year. Its measurements are, in effect, on a year-to-date basis. 35 An entity that reports half-yearly uses information available by mid-year or shortly thereafter in making the measurements in its financial statements for the first six-month period and information available by year-end or shortly thereafter for the twelve-month period. The twelve-month measurements will reflect possible changes in estimates of amounts reported for the first six-month period. The amounts reported in the interim financial report for the first six-month period are not retrospectively adjusted. Paragraphs 16A(d) and 26 require, however, that the nature and amount of any significant changes in estimates be disclosed. 36 An entity that reports more frequently than half-yearly measures income and expenses on a year-to-date basis for each interim period using information available when each set of financial statements is being prepared. Amounts of income and expenses reported in the current interim period will reflect any changes in estimates of amounts reported in prior interim periods of the financial year. The amounts reported in prior interim periods are not retrospectively adjusted. Paragraphs....
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....he new accounting policy prospectively from the earliest date practicable. 44 One objective of the preceding principle is to ensure that a single accounting policy is applied to a particular class of transactions throughout an entire financial year. Under Ind AS 8, a change in accounting policy is reflected by retrospective application, with restatement of prior period financial data as far back as is practicable. However, if the cumulative amount of the adjustment relating to prior financial years is impracticable to determine, then under Ind AS 8 the new policy is applied prospectively from the earliest date practicable. The effect of the principle in paragraph 43 is to require that within the current financial year any change in accounting policy is applied either retrospectively or, if that is not practicable, prospectively, from no later than the beginning of the financial year. 45 To allow accounting changes to be reflected as of an interim date within the financial year would allow two differing accounting policies to be applied to a particular class of transactions within a single financial year. The result would be interim allocation difficulties, obscured operating res....
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....he recognition of impairment losses on goodwill in Ind AS 36, and the effect of that interaction on subsequent interim and annual financial statements. Issue 3 Ind AS 34 paragraph 28 requires an entity to apply the same accounting policies in its interim financial statements as are applied in its annual financial statements. It also states that 'the frequency of an entity's 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 yearto- date basis.' 4 Ind AS 36 paragraph 124 states that 'An impairment loss recognised for goodwill shall not be reversed in a subsequent period.' 5-6 [Refer Appendix 1] 7 The appendix addresses the following issue: Should an entity reverse impairment losses recognised in an interim period on goodwill if a loss would not have been recognised, or a smaller loss would have been recognised, had an impairment assessment been made only at the end of a subsequent reporting period? Accounting Principle 8 An entity shall not reverse an impairment loss recognised in a previous interim period in respect of goodwill. 9 A....
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....in Ind AS 34, as Implementation Guidance is not an integral part of IAS 1. In order to maintain consistency with paragraph numbers of IAS 34, the paragraph number is retained in Ind AS 34. 6 Following paragraphs making references to Illustrative examples which are not integral part of IAS 34 have been deleted in Ind AS 34. The paragraph numbers have been retained in Ind AS 34 in order to maintain consistency with paragraph numbers of IAS 34: (i) Paragraph 22 making reference to Illustration A of 'Illustrative Examples' illustrating the periods required to be presented by an entity that reports half yearly and an entity that reports quarterly. (ii) Paragraph 40 making reference to Illustration B of 'Illustrative Examples' illustrating the general recognition and measurement principles set out in paragraphs 28-39. (iii) Paragraph 42 making reference to Illustration C of 'Illustrative Examples' illustrating the use of estimates in interim periods. 15[7 Paragraphs 46-54 and 56-57 related to effective date have not been included in Ind AS 34 as these are not relevant in Indian context. However, in order to maintain consistency with paragraph numbers of IAS 34, these paragraph nu....
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....unting estimates, errors, and changes in accounting policies. The two Standards do not contain quantified guidance as to materiality." 10. Inserted vide NOTIFICATION NO. G.S.R. 463(E) dated 24-07-2020 11. Substituted vide NOTIFICATION NO. G.S.R. 463(E) dated 24-07-2020 before it was read as "8[7. Paragraphs 46-54 related to effective date have not been included in Ind AS 34 as these are not relevant in Indian context. However, in order to maintain consistency with paragraph numbers of IAS 34, these paragraph numbers are retained in Ind AS 34.]" 12 Substituted vide NOTIFICATION NO. G.S.R. 419(E) dated 18-06-2021 before it was read as "31 Under the Framework for the Preparation and Presentation of Financial Statements in accordance with Indian Accounting Standards (the Framework) issued by the Institute of Chartered Accountants of India, recognition is the 'process of incorporating in the balance sheet or statement of profit and loss an item that meets the definition of an element and satisfies the criteria for recognition'. The definitions of assets, liabilities, income, and expenses are fundamental to recognition, at the end of both annual and interi....