IAS 34

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IAS 34, titled Interim Financial Reporting, is an International Accounting Standard issued by the International Accounting Standards Board (IASB). It prescribes the minimum content of an interim financial report and the principles for recognition and measurement in complete or condensed financial statements for an interim period.[1]

Scope and applicability

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IAS 34 does not mandate which entities are required to publish interim financial reports, how frequently, or how soon after the end of an interim period. These are typically decided by national governments, securities regulators, and stock exchanges.[2] However, if an entity is required or elects to publish an interim report in accordance with IFRS, it must follow the requirements of this standard.

Content of an interim financial report

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An entity may choose to provide either a full set of financial statements (as described in IAS 1) or condensed financial statements. A condensed report must include, at a minimum:[3]

  • A condensed statement of financial position (balance sheet).
  • A condensed statement of comprehensive income.
  • A condensed statement of changes in equity.
  • A condensed statement of cash flows.
  • Selected explanatory notes.

Recognition and measurement

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The fundamental principle in IAS 34 is that the same accounting policies should be applied in the interim report as are applied in the annual financial statements.[4]

The "year-to-date" approach

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Measurements for interim reporting purposes are made on a year-to-date basis, so that the frequency of reporting does not affect the measurement of the annual results.[5]

Formula: Income tax expense

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Unlike other expenses that are recognized when incurred, income tax expense in an interim period is recognized based on the best estimate of the weighted average annual income tax rate expected for the full financial year.[6]

Interim Tax Expense = Estimated Annual Effective Tax Rate
× Interim Pre-tax Income

Seasonal or cyclical revenues

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Revenues that are received seasonally, cyclically, or occasionally within a financial year should not be anticipated or deferred at an interim date if anticipation or deferral would not be appropriate at the end of the entity's financial year.[7] For example, a retailer with high Christmas sales must recognize that revenue in the fourth quarter, not spread it over the year.

Materiality

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In deciding how to recognize, measure, classify, or disclose an item for interim financial reporting purposes, materiality should be assessed in relation to the interim period financial data itself, rather than the estimated annual data.[8]

Periods to be presented

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Interim reports must include comparative periods as follows:[9]

  • Statement of Financial Position: As of the end of the current interim period and a comparative statement as of the end of the immediately preceding financial year.
  • Statements of Comprehensive Income: For the current interim period and cumulatively for the current financial year to date, with comparatives for the comparable interim periods of the immediately preceding financial year.
Summary of Comparative Periods (for a Q2 June Report)
Statement Current Period Comparative Period
Balance Sheet 30 June 2025 31 Dec 2024
Income Statement (Q2) April–June 2025 April–June 2024
Income Statement (YTD) Jan–June 2025 Jan–June 2024

References

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  1. ^ IAS 34.1; IAS 34.BC1.
  2. ^ IAS 34.1; IAS 34.BC4.
  3. ^ IAS 34.8–8A.
  4. ^ IAS 34.28.
  5. ^ IAS 34.28; IAS 34.BC10.
  6. ^ IAS 34.Appendix B12.
  7. ^ IAS 34.37.
  8. ^ IAS 34.23; IAS 34.BC9.
  9. ^ IAS 34.20.