ICAI issues interim financial reporting draft paper

Our Corporate Bureau

New Delhi, Sept 12: The Institute of Chartered Accountants of India (ICAI) has issued the exposure draft of a proposed accounting standard on ‘interim financial reporting’, which prescribes the minimum content of an interim financial report and the principles for recognition and measurement in a complete, or condensed financial statements for an interim period.

Timely and reliable interim financial reporting will help improve the ability of investors, creditors, and others to understand an enterprise’s capacity to generate earnings and cash flows, and its financial condition.

The exposure draft, issued by the accounting standards board of ICAI has sought comments from ICAI members and independent members by October 20.

After receiving the comments, the draft would be finalised for the approval of the ICAI council as per the laid down procedure. Thereafter, the final accounting standard on the subject will be issued.

The proposed accounting standard does not mandate which enterprises should be required to present interim financial reports, how frequently, or how soon after the end of an interim period. It proposes that if an enterprise is required, or elects to prepare and present an interim financial report, it should comply with this standard. The proposed standard recognises that a statute governing an enterprise, or a regulator, may require an enterprise to prepare and present certain information at an interim date, which may be different in form, and/or content, as required by the standard.

It also provides that in such a case the recognition and measurement principles as laid down are applied in respect of such information, unless otherwise specified in the statute, or by the regulator.

As per the proposed accounting standard, interim financial report means a financial report containing, either a set of complete financial statements, or a set of condensed financial statements for an interim period.

The proposed accounting standard requires that an interim financial report should include condensed balance sheet, condensed statement of profit and loss.