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Accounting
Standard 25 - Interim Financial Reporting
AS-22
Accounting for Taxes on Income
| Issuing
Authority: |
The
Institute of Chartered Accountants of India. |
| Effective
from: |
Accounting
periods commencing on or after 1-4-2002 |
| Applicable
to: |
All
enterprises required or electing to prepare and
present an interim financial report |
| Objective: |
To
prescribe the minimum content of an interim financial
report and to prescribe the principles for recognition
and measurement in a complete
or condensed financial statements for an interim
period. |
| Scope: |
If
any enterprise is required or elects to prepare
and present an interim financial report,it should
comply with this Standard. |
| Definitions: |
Interim
period: A financial reporting period shorter
than a full financial year.
Interim financial report : Financial report
containing either a complete set of financial statements
or a set of condensed financial statements(as described
in this standard) for an interim period. |
Minimum
Components of an Interim Financial Report
An interim financial report should include,at a minimum
the following components:
- condensed
balance sheet;
- condensed
statement of profit and loss;
- condensed
cash flow statement;and
- selected
explanatory notes.
However
presentation of a complete set of financial statements
or more than the minimum line items or selected explanatory
notes is not prohibited or discouraged.
Form and
Content of Interim Financial Statements
a) Where
complete set of financial statements are prepared and
presented in the interim financial report:
The form
and content of those statements should conform to the
requirements as applicable to annual complete set of
financial statements.
b) Where
a set of condensed financial statements are prepared
and presented in the interim financial report:
The condensed
statements should include,at a minimum,each of the headings
and sub-headings that were included in its most recent
annual financial statements and the selected explanatory
notes as required by this statement.Additional line
items or notes should be included if their omission
would make the condensed interim financial statements
misleading.
If an enterprise
presents basic and diluted earnings per share in its
annual financial statements in accordance with Accounting
Standard (AS) 20-Earnings Per Share, basic and diluted
earnings per share should be presented in accordance
with AS-20 on the face of the statement of profit and
loss,complete or condensed,for an interim period.
If an enterprise's annual financial report included
the consolidated financial statements in addition to
the parent's separate financial statements,the interim
financial report includes both the consolidated financial
statements and separate financial statements,complete
or condensed.
Selected
Explanatory Notes
The following minimum information should be included
in the notes,if not disclosed elsewhere in the interim
financial report:
- a statement
that the same accounting policies are followed in
the interim financial statements as those followed
in the most recent annual financial statements or
,if they have been changed, a description of the nature
and effect of the change;
- explanatory
comments about the seasonality of interim operations;
- the
nature and amount of items affecting assets,liablities,equity,net
income,or cash flows that are unusual because of their
nature,size,or incidence;
- the
nature and amount of changes in estimates of amounts
reported in prior interim periods of the current financial
year or in prior financial years,if those changes
have a material effect in the current interim period;
- issuances,buy-backs,repayments
and restructuring of debt,equity and potential equity
shares;
- dividends,aggregate
or per share(in absolute or percentage terms),separately
for equity shares and other shares;
- segment
revenue,segment capital employed and segment result
for primary segment(whether business segment or geographical
segment)-only if the enterprise is required in terms
of AS-17-Segment Reporting to disclose segment information
in its annual financial statements;
- the
effect of changes in the composition of the enterprise
during the interim period such as amalgamations,acquisition
or disposal of subsidiaries and long-term investments,restructurings
and discontinuing operations; and
- material
changes in contingent liabilities since the last annual
balance sheet date.
The above
information should normally be reported on a financial
year-to-date basis.However,any material events or transactions
necessary to an understanding of the current interim
period should also be disclosed.
Periods
for which Interim Financial Statements are required
to be presented
Interim
reports should include interim financial statements
(condensed or complete) for periods as follows:
| Balance Sheet |
At end of current interim period and at end of
immediately preceding financial year |
| Statement of Profit and Loss |
For current interim period, Cumulatively for current
financial year to date Comparative figures both
current and year-to-date of immediately preceding
financial year |
| Cash Flow Statement |
Cumulatively for the current financial year-to-date
Comparable figures for year-to-date-period of immediately
preceding financial year |
Enterprises
engaged in highly seasonal businesses are encouraged
to report financial information for twelve months ending
on the interim reporting date (alongwith comparable
previous year figures), in addition to the above
Materiality
Materiality
should be assessed in relation to the interim period
financial data.
Disclosure
in Annual Financial Statements
If an estimate of an amount reported in an interim
period is changed significantly during the financial
interim period of the financial year but a separate
financial report is not presented for that final interim
period, the nature and amount of that change in estimate
should be disclosed in a note to the annual financial
statements for that finanical year.
Recognition
and Measurement
Same
Accounting Policies as Annual
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.However, the
frequency of reporting should not affect the measurement
of annual results- hence,mesurements for interim reporting
purposes should be made on a year-to-date basis.
Anticipation
or deferral of seasonal or occasional revenues or unevenly
incurred costs for interim reporting purposes should
be made on the same basis as would be made at the end
of the financial year.
Use of
Estimates
The measurement
procedures followed should ensure reliablity and disclosure
of relevant material financial information.A greater
use of estimates may be necessary for interim financial
reporting.
Restatement
of Previouly Reported Interim Periods
A change
in accounting policy,other than one for which the transition
is specified by an Accounting Standard, should be reflected
by restating the financial statements of prior interim
periods of the current financial year.
Transitional
Provision
Comparable
figures for previous interim periods need not be presented
on the first occasion that an interim financial report
is presented in accordance with this standard, in respect
of profit and loss account and cash flow statement.
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