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IAS 34 Interim Financial Reporting Presented by Roger Nasr, Deloitte

IAS 34 Interim Financial Reporting Presented by Roger Nasr, Deloitte. LACPA- IFRS Seminars. IAS 34. Objective and Scope. Objective minimum contents of interim report recognition & measurement principles Scope all interim financial reports published in accordance with IFRS. IAS 34.

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IAS 34 Interim Financial Reporting Presented by Roger Nasr, Deloitte

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  1. IAS 34 Interim Financial Reporting Presented by Roger Nasr, Deloitte LACPA- IFRS Seminars

  2. IAS 34 Objective and Scope • Objective • minimum contents of interim report • recognition & measurement principles • Scope • all interim financial reports published in accordance with IFRS

  3. IAS 34 Interim report - minimum content • Condensed balance sheet • Condensed income statement • Condensed statement of changes in equity • Condensed cash flow statement • Selected explanatory notes

  4. IAS 34 Explanatory notes, examples • Accounting policies • statement that they are the same as in most recent annual financial statements • if changes description and disclosure • Compliance with IFRS • Comments on seasonality or cyclicality • Nature and amount of • unusual items (IAS 8) • changes in estimates

  5. IAS 34 Explanatory notes • Issuance, repurchases, and repayments of debt and equity securities • Dividends paid separately • Segment revenue & segment result for primary segment • Subsequent events • Changes in composition of the enterprise • Changes in contingent assets & liabilities

  6. IAS 34 Example: Quarterly interim financial statements

  7. IAS 34 Materiality greater use of estimates less materiality

  8. IAS 34 Principles for recognition and measurement • Same as in annual financial statements • no smoothing of income and expenses • recognition of assets, liabilities, income and expenses in accordance with the Framework and applicable Standards • measurement on a year-to-date basis • frequency of reporting should not affect measurement of annual results

  9. IAS 34 Application of recognition and measurement criteria • Maintenance expenditure • Revenues and expenses calculated on year-to-date basis • seasonal, cyclical or occasional revenues • Intangible assets • Income taxes in interim periods • Inventories

  10. IAS 34 Application, expenses • Recognition • present obligation and probable outflow • reliable estimate of the amount • Measurement • consider risks and uncertainties • Examples • provisions and employee benefits • planned maintenance for later interim periods • expenses calculated on an annual basis like bonuses, payroll tax or discount expenses

  11. IAS 34 Application, revenues • Recognition • transfer of significant risks and rewards • probable inflow and reliable measure • Measurement • consider risks and uncertainties • Example • seasonal, cyclical or occasional revenues • revenues calculated on an annual basis

  12. IAS 34 Application, intangible assets • Recognition • controlled by the enterprise as result of past events • expected inflow of future economic benefits • cost of the asset can be measured reliably • Examples • development cost for a new product

  13. IAS 34 Application, income taxes • What rate should be used? • estimated average annual effective income tax rate • The provisions of IAS 12 applies • at each interim reporting date • change in tax rates • recognition of deferred tax liabilities / assets

  14. IAS 34 Application, inventories • Same as in annual F/S • test of net realisable value • recognise variances with standard cost

  15. IAS 34 Changes in estimates • If significant change in an estimate of a previous interim period in the last interim period of a financial year  disclose nature and amount of the change

  16. IAS 34 Changes in accounting policy • Should be included in interim reports • if they are to be reflected in the next annual financial statements • restatement of prior interim reports of the current year • comparative data should be restated (IAS 8 )

  17. Comparison IAS 1/IAS 34 Presentation Complete set of financial statements • (IAS 1) • (a) balance sheet; • (b) income statement; • (c) statement showing either (i) all changes in equity or (ii) changes in equity other than those arising from capital transactions with owners and distributions to owners; • (d) cash flow statement; and • (e) accounting policies and explanatory notes. Condensed set of financial statements • (IAS 34) • (a) condensed balance sheet; • (b) condensed income statement; • (c) condensed statement showing either (i) all changes in equity or (ii) changes in equity other than those arising from capital transactions with owners and distributions to owners; • (d) condensed cash flow statement; and • (e) selected explanatory notes. If the enterprise decides to report a complete set of financial statements, the form and the content of those statements should conform to the requirements of IAS1

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