Interim Reporting - 20B

Question 1

What is Interim Reporting?

Answer 1

Financial reporting for periods of less than one year

Question 2

What is the primary purpose of Interim Reporting?

Answer 2

1. To provide information that is more timely than is available in the annual reports
2. To highlight business turning points which could get buried in the annual report

Question 3

What are the two views for Interim Reporting?

Answer 3

1. Discrete View - each interim period is a separate accounting period and must stand on it’s own
2. Integral View - each interim period is a integral part of the annual period

Question 4

Interim Reporting - Revenues

Answer 4

General Rule - Same as annual reports

Exceptions - None

Question 5

Interim Reporting - COGS

Answer 5

General Rule - Same as annual reports

Exceptions

1. Gross Profit Method may be used to estimate CGS and Ending Inventory for each interim period
2. Temporary declines in inventory market value need not be recognized
3. Recoveries of permanent declines may not exceed the original amount

Question 6

Interim Reporting - All other costs & exp

Answer 6

General rule - Same as annual reports

Exceptions - Expenditures which clearly benefit more than one interim period may be allocated among periods benefited

Question 7

Interim Reporting - Income Taxes

Answer 7

General Rule - (Year to date income x Estimated Annual effective tax rate) - (Expense recognized in previous periods)

Exceptions - None

The Effective Tax Rate expected should anticipate:

1. Capital Gains
2. Foreign Tax Rates

Question 8

Interim Reporting - Discontinued Operations & Extraordinary Items

Answer 8

General Rule - Recognized in Interim period as incurred

Exceptions - None

Question 9

Interim Reporting - Change in Accounting Principle

Answer 9

General Rule - Retrospective Application - Treat as if occurred in the first quarter of the year

Exceptions - None

Question 10

Does IFRS mandate Interim Reporting?

Answer 10

No

Question 11

If a company under IFRS elects Interim Reporting, what reports does IFRS require?

Answer 11

1. The Statement of Financial Position
2. The Statement of Comprehensive Income
3. The Statement of Change in Equity
4. The Statement of Cash Flows