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Quick Reference on Accounting Standard (AS) 25

Download Quick Reference on Accounting Standard (AS) 25 Interim Financial Reporting

This Standard applies if an entity is required or elects to publish an interim financial report.

The objective of AS 25 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.

Interim financial report means a financial report containing either a complete set of financial statements for an interim period or a set of condensed financial statements (as described in this Standard) for an interim period.

Contents of complete or condensed set of interim financial statements

(a) Balance Sheet;

(b) Statement of Profit and Loss;

(c) Cash Flow Statement; and

(d) Notes including those relating to accounting policies and other statements and explanatory material that are an integral part of the financial statements. In condensed financial reports only selected notes need to be presented.

Form and content of complete set of interim financial statements should conform to the requirements applicable to annual complete set of financial statements.

Minimum Requirements of a set of condensed interim financial statements

  • Headings and sub-headings used in most recent annual financial statements
  • Selected explanatory notes required by AS 25
  • Additional notes without which the report may be misleading
  • EPS for the interim period as per AS 20

Explanatory Statements

  • Statement that same accounting policies are followed in the interim financial statements as those followed in the most recent annual financial statements
  • If there is change in accounting policy, nature and effect of such change
  • Nature and amount of unusual and extraordinary items
  • Segment information
  • Materal changes in contingent liabilities since the last annual Balance Sheet date
  • Seasonality of operations
  • Nature and amount of change in estimates in comparison to prior interim period or prior financial year- if changes have material effect in current interim period
  • Issuances, buy-backs, repayment and restructuring of debt, equity and potential equity shares
  • Impact of changes in composition of enterprise, such as, amalgamations, restructuring and discontinuing operations
  • Material events subsequent to the end of interim period that have not been reflected in the financial statements for the interim period
  • Dividends, aggregate or per share, for equity and other shares

Periods for which interim financial statements are to be presented

  • Balance Sheet- End of current interim period & comparative Balance Sheet as at the end of immediately preceding financial year (FY)
  • Statement of Profit and Loss- For the current interim period, cumulatively for current FY to date, Comparative P/L for the comparable interim period of immediately preceding FY, Comparative year to date P/L of immediately preceding FY
  • Cash Flow Statement- Current FY to date, comparative statement for the comparable year to date period of immediately preceding FY

Other Aspects

  • Materiality
    • In deciding how to recognise, measure, classify, or disclose an item for interim financial reporting purposes, materiality should be assessed in relation to the interim period financial data.
  • Accounting Policies
    • An enterprise should 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.
    • Frequency of an enterprise’s reporting (annual, half-yearly, or quarterly) should not affect the measurement of its annual results. To achieve that objective, measurements for interim reporting purposes should be made on a year-to-date basis.

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