IAS 34

Contents

INTERNATIONAL ACCOUNTING STANDARD 34

INTERIM FINANCIAL REPORTING

OBJECTIVE

SCOPE

DEFINITIONS

CONTENT OF AN INTERIM FINANCIAL REPORT

Minimum components of an interim financial report

Form and content of interim financial statements

Significant events and transactions

Other disclosures

16A

Disclosure of compliance with IFRS Accounting Standards

Periods for which interim financial statements are required to be presented

Materiality

Periods for which interim financial statements are required to be presented

Materiality

DISCLOSURE IN ANNUAL FINANCIAL STATEMENTS

RECOGNITION AND MEASUREMENT

Same accounting policies as annual

Revenues received seasonally, cyclically, or occasionally

Costs incurred unevenly during the financial year

Applying the recognition and measurement principles

Use of estimates

RESTATEMENT OF PREVIOUSLY REPORTED INTERIM PERIODS

EFFECTIVE DATE

Use of estimates

RESTATEMENT OF PREVIOUSLY REPORTED INTERIM PERIODS

EFFECTIVE DATE

FOR THE ACCOMPANYING GUIDANCE LISTED BELOW, SEE PART B OF THIS EDITION

ILLUSTRATIVE EXAMPLES

FOR THE BASIS FOR CONCLUSIONS, SEE PART C OF THIS EDITION

BASIS FOR CONCLUSIONS

International Accounting Standard 34

Interim Financial Reporting

(IAS 34) is set out in

paragraphs 1–61

Interim Financial Reporting

(IAS 34) is set out in

paragraphs 1–61

. All the paragraphs have equal authority but retain the IASC format of the Standard when it was adopted by the IASB. IAS 34 should be read in the context of its

objective

and the

Basis for Conclusions

, the

Preface to IFRS Accounting Standards

and the

Conceptual Framework for Financial Reporting

IAS 8

and the

Conceptual Framework for Financial Reporting

IAS 8

Basis of Preparation of Financial Statements

provides a basis for selecting and applying accounting policies in the absence of explicit guidance.

[

Refer:

IAS 8 paragraphs 10–12

]

International Accounting Standard 34

Interim Financial Reporting

Objective

The objective of this Standard is to prescribe the minimum content of an

interim financial report

[

Refer:

paragraphs 5–27

interim financial report

[

Refer:

paragraphs 5–27

and

43–46

]

and to prescribe the principles for recognition and measurement

[

Refer:

paragraphs 28–42

]

in complete

[

Refer:

paragraph 5

]

or condensed financial statements

[

Refer:

paragraph 8

]

for an

interim period

Refer:

paragraph 5

]

or condensed financial statements

[

Refer:

paragraph 8

]

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.

Scope

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

, 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 reports. This Standard applies if an entity is required or elects to publish an interim financial report in accordance with IFRS Accounting Standards. The International Accounting Standards Committee

encourages publicly traded entities to provide interim financial reports that conform to the recognition, measurement,

[

Refer:

paragraphs 28–42

]

and disclosure

[

Refer:

paragraphs 8–25

]

principles set out in this Standard. Specifically, publicly traded entities are encouraged:

(a)

to provide interim financial reports at least as of the end of the first half of their financial year; and

(b)

to make their interim financial reports available not later than 60 days after the end of the interim period.

Each financial report, annual or interim, is evaluated on its own for conformity to IFRS 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 entity’s annual financial statements

[

Refer:

IFRS 18

paragraphs 28 and 29

]

from conforming

[

Refer:

IAS 8

paragraph 6B

]

to IFRS Accounting Standards if they otherwise do so.

If an entity’s

interim financial report

is described as complying with IFRS Accounting Standards, it must comply with all of the requirements of this Standard.

Paragraph 19

requires certain disclosures in that regard.

Definitions

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

IFRS 18

Presentation and Disclosure in Financial Statements

IFRS 18

Presentation and Disclosure in Financial Statements

) or a set of condensed financial statements (as described in this Standard) for an

interim period

Content of an interim financial report

IFRS 18

defines a complete set of financial statements as including the following components:

[

Refer:

IFRS 18

paragraphs 10–14

]

(a)

[

Refer:

IFRS 18

paragraphs 10–14

]

(a)

a statement (or statements) of financial performance for the reporting period;

(b)

a statement of financial position as at the end of the reporting period;

(c)

a statement of changes in equity for the reporting period;

(d)

a statement of cash flows for the reporting period;

(e)

notes for the reporting period;

(ea)

(d)

a statement of cash flows for the reporting period;

(e)

notes for the reporting period;

(ea)

comparative information in respect of the preceding period as specified in

paragraphs 31-32 of IFRS 18

; and

(f)

a statement of financial position as at the beginning of the preceding period if required by

paragraph 37 of

IFRS 18

paragraph 37 of

IFRS 18

An entity may use titles for the statements other than those used in this Standard. For example, an entity may use the title ‘balance sheet’ instead of ‘statement of financial position’.

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

[

Refer:

IFRS 18

paragraphs 28 and 29

]

. This Standard defines the minimum content of an

interim financial report

as including condensed financial statements

[

Refer:

paragraphs 8

and

9–14

]

as including condensed financial statements

[

Refer:

paragraphs 8

and

9–14

]

and selected explanatory notes

[

Refer:

paragraphs 15

and

16A

]

. 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

IFRS 18

) in its

interim financial report

, rather than condensed financial statements

[

Refer:

paragraphs 8

and

9–14

]

and selected explanatory notes.

[

Refer:

paragraphs 15

and

16A

]

[

Refer:

paragraphs 8

and

9–14

]

and selected explanatory notes.

[

Refer:

paragraphs 15

and

16A

]

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

[

Refer:

paragraphs 28–42

]

[

Refer:

paragraphs 28–42

]

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 16A) as well as those required by other IFRSs.

Minimum components of an interim financial report

interim financial report

shall include, at a minimum, the following components:

(a)

interim financial report

shall include, at a minimum, the following components:

(a)

a condensed statement (or condensed statements) of financial performance;

[

Refer:

paragraphs 10

and

]

(b)

a condensed statement of financial position;

[

Refer:

paragraphs 10–11A

and

]

(c)

a condensed statement of changes in equity;

[

Refer:

paragraphs 10

and 14

]

(d)

a condensed statement of cash flows; and

[

Refer:

paragraphs 10

and

]

(e)

]

(d)

a condensed statement of cash flows; and

[

Refer:

paragraphs 10

and

]

(e)

selected explanatory notes.

[

Refer:

paragraphs 15

and

16A

]

If an entity presents items of profit or loss in a statement of profit or loss separate from a statement presenting comprehensive income as described in

paragraph

12(b) of IFRS 18

, it presents interim condensed information from the statement of profit or loss.

Form and content of interim financial statements

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

IFRS 18

for a complete set of financial statements.

If an entity publishes a set of condensed financial statements in its

interim financial report

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

[

Refer:

IFRS 18

paragraphs 28 and 29

]

[

Refer:

IFRS 18

paragraphs 28 and 29

]

and the selected explanatory notes as required by this Standard. In preparing condensed financial statements, an entity shall apply this Standard and also the requirements in

paragraphs 41–45 of

IFRS 18

and in

paragraphs 6A–6N of

IAS 8

Basis of Preparation of Financial Statements

or, for entities applying

IFRS 19

Subsidiaries without Public Accountability: Disclosures

, the requirements in

Subsidiaries without Public Accountability: Disclosures

, the requirements in

paragraphs 173–175 of

IFRS 19

instead of the requirements in

paragraphs 6F

and

6I of

IAS 8

. Additional line items or notes shall be included if their omission would make the condensed interim financial statements misleading

[IFRIC®

Update

, July 2014, Agenda Decision, ‘IAS 34

Interim Financial Reporting

—condensed statement of cash flows’

Interim Financial Reporting

—condensed statement of cash flows’

The Interpretations Committee received a request to clarify the application of the requirements regarding the presentation and content of the condensed statement of cash flows in the interim financial statements according to IAS 34.

The submitter observed that there are divergent views on the presentation and content of the condensed statement of cash flows. One view is that an entity should present a detailed structure of the condensed statement of cash flows showing cash flows by nature. Another view is that an entity may present a three-line condensed statement of cash flows showing only a total for each of operating, investing and financing cash flow activities.

The Interpretations Committee noted that a condensed statement of cash flows is one of the primary statements that is included as part of an interim financial report as prescribed by paragraph 8 of IAS 34. Paragraph 10 of IAS 34 specifies that each of the condensed statements shall include, at a minimum, each of the headings and subtotals that were included in the most recent annual financial statements

. Paragraph 10 of IAS 34 also requires additional line items to be included if their omission would make the interim financial statements misleading.

The Interpretations Committee also noted that in an interim financial report:

(a)

an entity shall include 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 (see paragraph 15 of IAS 34).

(b)

the overriding goal is to ensure that an interim financial report includes all information that is relevant to understanding an entity’s financial position and performance during the interim period (see paragraph 25 of IAS 34). The Interpretations Committee further noted that in accordance with paragraph OB20 of the IASB’s

Conceptual Framework

, information about cash flows helps users to understand a reporting entity’s operations, evaluate its financing and investing activities, assess its liquidity or solvency and interpret other information about financial performance.

In this respect, the Interpretations Committee noted that to meet the requirements in paragraphs 10, 15 and 25 of IAS 34 a condensed statement of cash flows should include all information that is relevant in understanding the entity’s ability to generate cash flows and the entity’s needs to utilise those cash flows. It also noted that it did not expect that a three-line presentation alone would meet the requirements in IAS 34.

On the basis of this analysis, the Interpretations Committee determined that an Interpretation or an amendment to a Standard was not necessary. Consequently, the Interpretations Committee decided not to add this issue to its agenda.]

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

IAS 33

Earnings per Share

11A

IAS 33

Earnings per Share

11A

If an entity presents items of profit or loss in a statement of profit or loss separate from a statement presenting comprehensive income as described in

paragraph

12(b) of IFRS 18

, it presents basic and diluted earnings per share in the statement of profit or loss.

IFRS 18

provides guidance on the structure of financial statements. The Illustrative Examples that accompany IFRS 18 illustrate ways in which the statement of financial position, statement(s) of financial performance and statement of changes in equity may be presented.

[Deleted]

interim financial report

is prepared on a consolidated basis if the entity’s most recent annual financial statements were consolidated statements. The parent’s separate financial statements are not consistent or comparable with the consolidated statements in the most recent annual financial report

. If an entity’s annual financial report included the parent’s separate financial statements in addition to consolidated financial statements, this Standard neither requires nor prohibits the inclusion of the parent’s separate statements in the entity’s interim financial report.

Significant events and transactions

[

Refer:

Basis for Conclusions paragraphs BC3 and BC4

]

[IFRIC®

Update

, July 2009, Agenda Decision, ‘IAS 34

Interim Financial Reporting

—Interim disclosures about fair value’

The IFRIC received a request to provide guidance on whether updates to annual fair value disclosures are required in condensed interim financial reports.

The IFRIC noted that in accordance with IAS 34, an interim financial report provides an update on the latest complete set of annual financial statements

. 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 financial period, in accordance with IAS 34 its interim financial report should provide an explanation of, and update to, the information included in the financial statements for the last annual financial period.

The IFRIC concluded that IAS 34 provides sufficient guidance to enable entities to decide whether updates to fair value disclosures are required in interim financial reports and decided not to add the issue to its agenda as it did not expect diversity in practice.]

An entity shall include in its

interim financial report

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 entity’s

interim financial report

15A

A user of an entity’s

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, assets arising from contracts with customers, 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)

(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 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

(m)

changes in contingent liabilities or contingent assets.

15C

Individual IFRSs 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.

[Deleted]

Other disclosures

16A

In addition to disclosing significant events and transactions in accordance with

paragraphs 15–15C

, an entity shall include the following information, in the notes to its interim financial statements or elsewhere in the

interim financial report

. The following disclosures shall be given either in the interim financial statements or incorporated by cross-reference from the interim financial statements to some other statement (such as management commentary or risk report) that is available to users of the financial statements on the same terms as the interim financial statements and at the same time

. If users of the financial statements do not have access to the information incorporated by cross-reference on the same terms and at the same time, the interim financial report is incomplete.

[

Refer:

Basis for Conclusions paragraphs BC7–BC10

]

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 change.

(b)

explanatory comments about the seasonality or cyclicality of interim operations.

(c)

the nature and amount of items affecting assets, liabilities, equity, net income or cash flows that are unusual because of their nature, size or incidence.

(d)

the nature and amount of changes in estimates of amounts reported in prior interim periods of the current financial year or changes in estimates of amounts reported in prior financial years.

(e)

issues, repurchases and repayments of debt and equity securities.

(f)

dividends paid (aggregate or per share) separately for ordinary shares and other shares.

(g)

the following segment information (disclosure of segment information is required in an entity’s interim financial report only if

IFRS 8

Operating Segments

requires that entity to disclose segment information in its annual financial statements):

(i)

requires that entity to disclose segment information in its annual financial statements):

(i)

revenues from external customers, if included in the measure of segment profit or loss reviewed by the chief operating decision maker or otherwise regularly provided to the chief operating decision maker.

(ii)

intersegment revenues, if included in the measure of segment profit or loss reviewed by the chief operating decision maker or otherwise regularly provided 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.

[

Refer:

Basis for Conclusions paragraph BC6

]

(v)

[

Refer:

Basis for Conclusions paragraph BC6

]

(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 composition of the entity during the interim period, including business combinations, obtaining or losing control of subsidiaries and long‑term investments, restructurings, and discontinued operations. In the case of business combinations, the entity shall disclose the information required by

IFRS 3

Business Combinations

(j)

IFRS 3

Business Combinations

(j)

for financial instruments, the disclosures about fair value required by

paragraphs 91–93(h)

94–96

98 and 99

IFRS 13

Fair Value Measurement

and

paragraphs 25, 26

and

28–30

IFRS 7

Financial Instruments: Disclosures

(k)

for entities becoming, or ceasing to be, investment entities, as defined in

IFRS 10

Consolidated Financial Statements

, the disclosures in

IFRS 12

Disclosure of Interests in Other Entities

paragraph 9B

(l)

, the disclosures in

IFRS 12

Disclosure of Interests in Other Entities

paragraph 9B

(l)

the disaggregation of revenue from contracts with customers required by

paragraphs 114–115 of IFRS 15

Revenue from Contracts with Customers

(m)

the disclosures about management-defined performance measures required by

paragraphs 121–125 of

IFRS 18

[

Refer:

Basis for Conclusions paragraphs BC10A–BC10C

]

17–18

[Deleted]

Disclosure of compliance with IFRS Accounting Standards

]

17–18

[Deleted]

Disclosure of compliance with IFRS Accounting Standards

If an entity’s

interim financial report

is in compliance with this Standard, that fact shall be disclosed. An interim financial report shall not be described as complying with IFRS Accounting Standards unless it complies with all the requirements of IFRS Accounting Standards.

Periods for which interim financial statements are required to be presented

Interim reports

Periods for which interim financial statements are required to be presented

Interim reports

shall include interim financial statements (condensed

[

Refer:

paragraphs 8

and

9–19

]

or complete) for periods as follows:

(a)

statement of financial position as of the end of the current

interim period

and a comparative statement of financial position as of the end of the immediately preceding financial year.

(b)

statement(s) of financial performance for the current interim period and cumulatively for the current financial year to date, with comparative statement(s) of financial performance for the comparable interim periods (current and year‑to‑date) of the immediately preceding financial year. As permitted by

IFRS 18

, an interim report may present for each period a statement (or statements) of financial performance.

(c)

statement of changes in equity cumulatively for the current financial year to date, with a comparative statement for the comparable year‑to‑date period of the immediately preceding financial year.

(d)

statement of cash flows cumulatively for the current financial year to date, with a comparative statement for the comparable year‑to‑date period of the immediately preceding financial year.

For an entity whose business is highly seasonal, financial information for the twelve months up to the end of the interim period and 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.

Part A of the illustrative examples accompanying this Standard illustrates the periods required to be presented by an entity that reports half‑yearly and an entity that reports quarterly.

Materiality

[

Note:

IFRS Practice Statement 2

Making Materiality Judgements

(Practice Statement) provides reporting entities with guidance on making materiality judgements when preparing general purpose financial statements in accordance with IFRS Standards. In particular, paragraphs 84–88 of the Practice Statement provide guidance on how to make materiality judgement in the context of interim reporting. The Practice Statement is non-mandatory guidance developed by the International Accounting Standards Board (Board). It is not a Standard

. It is not a Standard. Therefore, its application is not required to state compliance with IFRS Standards]

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.

IFRS 18

defines material information and requires separate disclosure of material items, including (for example) discontinued operations, and

IAS 8

requires disclosure of changes in accounting estimates, errors, and changes in accounting policies. The two Standards do not contain quantified guidance as to materiality.

While judgement is always required in assessing materiality, this Standard bases the recognition and disclosure decision on data for the

interim period

by itself for reasons of understandability of the interim figures. Thus, for example, unusual items, changes in accounting policies or estimates, and errors are recognised and disclosed on the basis of materiality in relation to interim period data to avoid misleading inferences that might result from non‑disclosure. The overriding goal is to ensure that an

interim financial report

includes all information that is relevant to understanding an entity’s financial position and performance during the interim period.

Disclosure in annual financial statements

If an estimate of an amount reported in an

interim period

If an estimate of an amount reported in an

interim period

is changed significantly during the final interim period of the financial year but a separate financial report is not published for that final interim period, the nature and amount of that change in estimate shall be disclosed in a note to the annual financial statements

[

Refer:

IFRS 18

paragraphs 28 and 29

]

for that financial year.

IAS 8

[

Refer:

IFRS 18

paragraphs 28 and 29

]

for that financial year.

IAS 8

requires disclosure of the nature and (if practicable) the amount of a change in estimate that either has a material effect in the current period or is expected to have a material effect in subsequent periods

[

Refer:

IAS 8 paragraphs 39

and

]

Paragraph 16A(d)

of this Standard requires similar disclosure in an

interim financial report

of this Standard requires similar disclosure in an

interim financial report

. Examples include changes in estimate in the final

interim period

relating to inventory write‑downs, restructurings, or impairment losses that were reported in an earlier interim period of the financial year. The disclosure required by the preceding paragraph is consistent with the IAS 8 requirement and is intended to be narrow in scope—relating only to the change in estimate. An entity is not required to include additional interim period financial information in its annual financial statements.

[

Refer:

IFRS 18

paragraphs 28 and 29

]

Recognition and measurement

[

Refer:

Illustrative Examples Part B

IAS 33 paragraph 37

IAS 33 Basis for Conclusions paragraphs BC10–BC14

IAS 39 paragraph AG106

]

Same accounting policies as annual

An entity shall apply the same accounting policies in its interim financial statements as are applied in its annual financial statements,

[

Refer:

IFRS 18

paragraphs 28 and 29

]

paragraphs 28 and 29

]

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. However, 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 year‑to‑date basis.

[

Refer:

IFRIC 10

IAS 19 Basis for Conclusions paragraphs BC58–BC63

]

Requiring that 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.

[

Refer:

IFRS 18

paragraphs 28 and 29

]

To illustrate:

(a)

[

Refer:

IFRS 18

paragraphs 28 and 29

]

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.

[

Refer:

IFRS 18

paragraphs 28 and 29

]

[

Refer:

IFRS 18

paragraphs 28 and 29

]

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 interim period either by accrual of an additional amount of loss or by reversal of the previously recognised amount;

[

Refer:

IFRIC 10 paragraphs 3–9

]

(b)

[

Refer:

IFRIC 10 paragraphs 3–9

]

(b)

a cost that does not meet the definition of an asset at the end of an interim period is not deferred in the statement of financial position either to await future information as to whether it has met the definition of an asset or to smooth earnings over interim periods within a financial year; and

(c)

income tax expense is recognised in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. Amounts accrued for income tax expense in one interim period may have to be adjusted in a subsequent interim period of that financial year if the estimate of the annual income tax rate changes.

Under the

Conceptual Framework for Financial Reporting

(

Conceptual Framework

Under the

Conceptual Framework for Financial Reporting

(

Conceptual Framework

), recognition is the process of capturing, for inclusion in the statement of financial position or the statement(s) of financial performance, an item that meets the definition of one of the elements of the financial statements. The definitions of assets, liabilities, income, and expenses are fundamental to recognition, at the end of both annual and interim financial reporting periods.

For assets, the same tests of future economic benefits apply at interim dates and at the end of an entity’s financial year. Costs that, by their nature, would not qualify as assets at financial year‑end would not qualify at interim dates either. Similarly, a liability at the end of an interim reporting period must represent an existing obligation at that date, just as it must at the end of an annual reporting period.

An essential characteristic of income (revenue) and expenses is that the related inflows and outflows of assets and liabilities have already taken place. If those inflows or outflows have taken place, the related revenue and expense are recognised; otherwise they are not recognised. The

Conceptual Framework

does not allow the recognition of items in the statement of financial position which do not meet the definition of assets or liabilities.

In measuring the assets, liabilities, income, expenses, and cash flows reported in its financial statements, an entity that reports only annually is able to take into account information that becomes available throughout the financial year. Its measurements are, in effect, on a year‑to‑date basis.

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

require, however, that the nature and amount of any significant changes in estimates be disclosed.

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 16A(d)

and 26

require, however, that the nature and amount of any significant changes in estimates be disclosed.

Revenues received seasonally, cyclically, or occasionally

Revenues that are received seasonally, cyclically, or occasionally within a financial year shall not be anticipated or deferred as of an interim date if anticipation or deferral would not be appropriate at the end of the entity’s financial year.

Examples include dividend revenue, royalties, and government grants. Additionally, some entities consistently earn more revenues in certain

interim periods

of a financial year than in other interim periods, for example, seasonal revenues of retailers. Such revenues are recognised when they occur.

Costs incurred unevenly during the financial year

Costs that are incurred unevenly during an entity’s financial year shall be anticipated or deferred for interim reporting purposes if, and only if, it is also appropriate to anticipate or defer that type of cost at the end of the financial year.

Applying the recognition and measurement principles

Part B of the illustrative examples accompanying this Standard provides examples of applying the general recognition and measurement principles set out in

paragraphs 28–39

[

Refer:

IAS 33 paragraph 37

IAS 33 Basis for Conclusions paragraphs BC10–BC14

IAS 39 paragraph AG106

]

Use of estimates

IAS 39 paragraph AG106

]

Use of estimates

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

[

Refer:

paragraphs 23–25

]

financial information that is relevant

[

Refer:

Conceptual Framework

paragraphs 2.6–2.11

]

financial information that is relevant

[

Refer:

Conceptual Framework

paragraphs 2.6–2.11

]

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.

[The term ‘faithful representation’, which was used in the

Conceptual Framework

issued in 2010 and is also used in the revised version of the

Conceptual Framework

issued in 2018, encompasses the main characteristics that the

Framework

called ‘reliability’ (refer

Conceptual Framework

paragraphs 2.12–2.19

and

Basis for Conclusions paragraphs BC2.21–BC2.31

and

BC105J

).]

Part C of the illustrative examples accompanying this Standard provides examples of the use of estimates in

interim periods

Restatement of previously reported interim periods

A change in accounting policy, other than one for which the transition is specified by a new IFRS, shall be reflected by:

(a)

restating the financial statements of prior

interim periods

(a)

restating the financial statements of prior

interim periods

of the current financial year and the comparable interim periods of any prior financial years that will be restated in the annual financial statements

[

Refer:

IFRS 18

paragraphs 28 and 29

]

in accordance with

IAS 8

; or

(b)

when it is impracticable

[

Refer:

IAS 8 paragraphs 50–53

]

to determine the cumulative effect at the beginning of the financial year of applying a new accounting policy to all prior periods, adjusting the financial statements of prior interim periods of the current financial year, and comparable interim periods of prior financial years to apply the new accounting policy prospectively from the earliest date practicable.

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

IAS 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

[

Refer:

[

Refer:

IAS 8 paragraphs 50–53

]

to determine, then under IAS 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.

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 results, and complicated analysis and understandability of

interim period

information.

Effective date

interim period

information.

Effective date

This Standard becomes operative for financial statements covering periods beginning on or after 1 January 1999. Earlier application is encouraged.

IAS 1 (as revised in 2007)

amended the terminology used throughout IFRSs. In addition it amended

paragraphs 4

and

, deleted paragraph 13 and added paragraphs

and

11A

and

, deleted paragraph 13 and added paragraphs

and

11A

. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies

IAS 1 (revised 2007)

for an earlier period, the amendments shall be applied for that earlier period.

IFRS 3

(as revised in 2008) amended

paragraph 16(i)

IFRS 3

(as revised in 2008) amended

paragraph 16(i)

. An entity shall apply that amendment for annual periods beginning on or after 1 July 2009. If an entity applies

IFRS 3

(revised 2008) for an earlier period, the amendment shall also be applied for that earlier period.

Paragraphs 15

35 and 36

were amended,

paragraphs 15A–15C

and

16A

were added and paragraphs 16–18 were deleted by

Improvements to IFRSs

and

16A

were added and paragraphs 16–18 were deleted by

Improvements to IFRSs

in May 2010. An entity shall apply those amendments for annual periods beginning on or after 1 January 2011. Earlier application is permitted. If an entity applies the amendments for an earlier period it shall disclose that fact.

IFRS 13

, issued in May 2011, added

paragraph 16A(j)

. An entity shall apply that amendment when it applies

IFRS 13

paragraph 16A(j)

. An entity shall apply that amendment when it applies

IFRS 13

Presentation of Items of Other Comprehensive Income

(Amendments to IAS 1), issued in June 2011, amended

paragraphs 8, 8A

11A

and

. An entity shall apply those amendments when it applies

IAS 1

as amended in June 2011.

Annual Improvements 2009–2011 Cycle

as amended in June 2011.

Annual Improvements 2009–2011 Cycle

, issued in May 2012, amended paragraph 5 as a consequential amendment derived from the amendment to

IAS 1

Presentation of Financial Statements

. An entity shall apply that amendment retrospectively in accordance with

IAS 8

Accounting Policies, Changes in Accounting Estimates and Errors

IAS 8

Accounting Policies, Changes in Accounting Estimates and Errors

for annual periods beginning on or after 1 January 2013. Earlier application is permitted. If an entity applies that amendment for an earlier period it shall disclose that fact.

Annual Improvements 2009–2011 Cycle

, issued in May 2012, amended

paragraph 16A

Annual Improvements 2009–2011 Cycle

, issued in May 2012, amended

paragraph 16A

. An entity shall apply that amendment retrospectively in accordance with

IAS 8

Accounting Policies, Changes in Accounting Estimates and Errors

for annual periods beginning on or after 1 January 2013. Earlier application is permitted. If an entity applies that amendment for an earlier period it shall disclose that fact.

[

Refer:

Basis for Conclusions paragraph BC6

]

Investment Entities

(Amendments to

IFRS 10

IFRS 12

and

IAS 27

), issued in October 2012, amended

paragraph 16A

. An entity shall apply that amendment for annual periods beginning on or after 1 January 2014. Earlier application of

Investment Entities

is permitted. If an entity applies that amendment earlier it shall also apply all amendments included in

Investment Entities

at the same time.

IFRS 15

Investment Entities

at the same time.

IFRS 15

Revenue from Contracts with Customers

, issued in May 2014, amended

paragraphs 15B

and

16A

. An entity shall apply those amendments when it applies IFRS 15.

Annual Improvements to IFRSs 2012–2014 Cycle

, issued in September 2014, amended paragraph 16A. An entity shall apply that amendment retrospectively in accordance with

IAS 8

Accounting Policies, Changes in Accounting Estimates and Errors

IAS 8

Accounting Policies, Changes in Accounting Estimates and Errors

for annual periods beginning on or after 1 January 2016. Earlier application is permitted. If an entity applies the amendment for an earlier period it shall disclose that fact.

Disclosure Initiative

(Amendments to IAS 1), issued in December 2014, amended paragraph 5. An entity shall apply that amendment for annual periods beginning on or after 1 January 2016. Earlier application of that amendment is permitted.

Amendments to References to the Conceptual Framework in IFRS Standards

, issued in 2018, amended paragraphs 31 and 33. An entity shall apply those amendments for annual periods beginning on or after 1 January 2020. Earlier application is permitted if at the same time an entity also applies all other amendments made by

Amendments to References to the Conceptual Framework in IFRS Standards

. An entity shall apply the amendments to IAS 34 retrospectively in accordance with

IAS 8

Accounting Policies, Changes in Accounting Estimates and Errors

IAS 8

Accounting Policies, Changes in Accounting Estimates and Errors

. However, if an entity determines that retrospective application would be impracticable or would involve undue cost or effort, it shall apply the amendments to IAS 34 by reference to paragraphs 43–45 of this Standard and paragraphs 23–28, 50–53 and 54F of IAS 8.

Definition of Material

(Amendments to IAS 1 and IAS 8), issued in October 2018, amended

paragraph 24

. An entity shall apply those amendments prospectively for annual periods beginning on or after 1 January 2020. Earlier application is permitted. If an entity applies those amendments for an earlier period, it shall disclose that fact. An entity shall apply those amendments when it applies the amendments to the definition of material in paragraph 7 of IAS 1 and paragraphs 5 and 6 of IAS 8.

Disclosure of Accounting Policies

, which amends

IAS 1

and

IFRS Practice Statement 2

Making Materiality Judgements

, and was issued in February 2021, amended

paragraph 5

. An entity shall apply that amendment for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted. If an entity applies the amendment for an earlier period, it shall disclose that fact.

IFRS 18

issued in April 2024 amended

paragraphs 1–5

7–10

11A–12

(and its related heading),

and

and added

paragraph 16A(m)

. An entity shall apply those amendments when it applies

IFRS 18

. In interim financial statements in the first year of applying