IAS 34

IAS Standard 34

Interim Financial Reporting

In April 2001 the International Accounting Standards Board adopted IAS 34 Interim Financial
Reporting, which had originally been issued by the International Accounting Standards
Committee in 2000. IAS 34 that was issued in 2000 replaced the original version that was
published in February 1998.
Other Standards have made minor consequential amendments to IAS 34. They include
Improvements to IFRSs (issued May 2010), IFRS 13 Fair Value Measurement (issued May 2011),
Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) (issued June 2011),
Annual Improvements to IFRSs 20092011 Cycle (issued May 2012), Investment Entities
(Amendments to IFRS 10, IFRS 12 and IAS 27) (issued October 2012), IFRS 15 Revenue from
Contracts with Customers (issued May 2014), Annual Improvements to IFRSs 20122014 Cycle (issued
September 2014), Disclosure Initiative (Amendments to IAS 1) (issued December 2014) and
IFRS 16 Leases (issued January 2016).

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CONTENTS
from paragraph
INTRODUCTION

IN1

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

15
16A

Disclosure of compliance with IFRSs

19

Periods for which interim financial statements are required to be presented

20

Materiality

23

DISCLOSURE IN ANNUAL FINANCIAL STATEMENTS

26

RECOGNITION AND MEASUREMENT

28

Same accounting policies as annual

28

Revenues received seasonally, cyclically, or occasionally

37

Costs incurred unevenly during the financial year

39

Applying the recognition and measurement principles

40

Use of estimates

41

RESTATEMENT OF PREVIOUSLY REPORTED INTERIM PERIODS

43

EFFECTIVE DATE

46

FOR THE ACCOMPANYING DOCUMENTS LISTED BELOW, SEE PART B OF

THIS EDITION
BASIS FOR CONCLUSIONS
ILLUSTRATIVE EXAMPLES

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International Accounting Standard 34 Interim Financial Reporting (IAS 34) is set out in
paragraphs 157. 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 International Financial Reporting
Standards and the Conceptual Framework for Financial Reporting. IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors provides a basis for selecting and applying
accounting policies in the absence of explicit guidance.

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Introduction
IN1

This Standard (IAS 34) addresses interim financial reporting, a matter not
covered in a prior Standard. IAS 34 is effective for accounting periods beginning
on or after 1 January 1999.

IN2

An interim financial report is a financial report that contains either a complete

or condensed set of financial statements for a period shorter than an entitys full
financial year.

IN3

This Standard does not mandate which entities should publish interim financial
reports, how frequently, or how soon after the end of an interim period. In
IASCs judgement, those matters should be decided by national governments,
securities regulators, stock exchanges, and accountancy bodies. This Standard
applies if a company is required or elects to publish an interim financial report
in accordance with Standards.

IN4

This Standard:
(a)

defines the minimum content of an interim financial report, including

disclosures; and

(b)

identifies the accounting recognition and measurement principles that

should be applied in an interim financial report.

IN5

The minimum content of an interim financial report is a condensed statement

of financial position, a condensed statement or statements of profit or loss and
other comprehensive income, a condensed statement of cash flows, a condensed
statement of changes in equity, and selected explanatory notes. If an entity
presents the items of profit or loss in a separate statement as described in
paragraph 10A of IAS 1 Presentation of Financial Statements (as amended in 2011), it
presents interim condensed information from that statement.

IN6

On the presumption that anyone who reads an entitys interim report will also
have access to its most recent annual report, virtually none of the notes to the
annual financial statements are repeated or updated in the interim report.
Instead, the interim notes include primarily an explanation of the events and
changes 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.

IN7

An entity should apply the same accounting policies in its interim financial
report 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. The
frequency of an entitys reportingannual, half-yearly, or quarterlyshould not
affect the measurement of its annual results. To achieve that objective,
measurements for interim reporting purposes are made on a year-to-date basis.

IN8

Part B of the illustrative examples accompanying the Standard provides

guidance for applying the basic recognition and measurement principles at
interim dates to various types of asset, liability, income, and expense. Income

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tax expense for an interim period is based on an estimated average annual
effective income tax rate, consistent with the annual assessment of taxes.
IN9

In deciding how to recognise, classify, or disclose an item for interim financial

reporting purposes, materiality is to be assessed in relation to the interim period
financial data, not forecast annual data.

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International Accounting Standard 34

Interim Financial Reporting
Objective
The objective of this Standard is to prescribe the minimum content of an
interim financial report and to prescribe the principles for recognition and
measurement in complete or condensed financial statements for an interim
period. Timely and reliable interim financial reporting improves the ability of
investors, creditors, and others to understand an entitys capacity to generate
earnings and cash flows and its financial condition and liquidity.

Scope
1

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. 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 International Financial Reporting Standards (IFRSs). The International
Accounting Standards Committee1 encourages publicly traded entities to
provide interim financial reports that conform to the recognition,
measurement, and disclosure 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 IFRSs. 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 entitys
annual financial statements from conforming to IFRSs if they otherwise do so.

If an entitys interim financial report is described as complying with IFRSs, it

must comply with all of the requirements of this Standard. Paragraph 19
requires certain disclosures in that regard.

Definitions
4

The following terms are used in this Standard with the meanings
specified:

The International Accounting Standards Committee was succeeded by the International Accounting
Standards Board, which began operations in 2001.

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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 IAS 1 Presentation of
Financial Statements (as revised in 2007)) or a set of condensed financial
statements (as described in this Standard) for an interim period.

Content of an interim financial report

5

IAS 1 defines a complete set of financial statements as including the following

components:
(a)

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

(b)

a statement of profit or loss and other comprehensive income for the

period;

(c)

a statement of changes in equity for the period;

(d)

a statement of cash flows for the period;

(e)

notes, comprising significant accounting policies and other explanatory

information;

(ea)

comparative information in respect of the preceding period as specified

in paragraphs 38 and 38A of IAS 1; and

(f)

a statement of financial position as at the beginning of the preceding

period when an entity applies an accounting policy retrospectively or
makes a retrospective restatement of items in its financial statements, or
when it reclassifies items in its financial statements in accordance with
paragraphs 40A40D of IAS 1.

An entity may use titles for the statements other than those used in this
Standard. For example, an entity may use the title statement of comprehensive
income instead of statement of profit or loss and other comprehensive income.
6

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. This Standard defines the minimum content of an interim financial
report as including condensed financial statements and selected explanatory
notes. 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 IAS 1) in its
interim financial report, rather than condensed financial statements and
selected explanatory notes. 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 applies also to

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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

8

An interim financial report shall include, at a minimum, the following

components:

8A

(a)

a condensed statement of financial position;

(b)

a condensed statement or condensed statements of profit or loss

and other comprehensive income;

(c)

a condensed statement of changes in equity;

(d)

a condensed statement of cash flows; and

(e)

selected explanatory notes.

If an entity presents items of profit or loss in a separate statement as

described in paragraph 10A of IAS 1 (as amended in 2011), it presents
interim condensed information from that statement.

Form and content of interim financial statements

9

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 IAS 1 for a complete set of financial statements.

10

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 and the selected explanatory
notes as required by this Standard. Additional line items or notes shall
be included if their omission would make the condensed interim
financial statements misleading.

11

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.2

11A

If an entity presents items of profit or loss in a separate statement as

described in paragraph 10A of IAS 1 (as amended in 2011), it presents basic
and diluted earnings per share in that statement.

12

IAS 1 (as revised in 2007) provides guidance on the structure of financial

statements. The Implementation Guidance for IAS 1 illustrates ways in which
the statement of financial position, statement of comprehensive income and
statement of changes in equity may be presented.

13

[Deleted]

This paragraph was amended by Improvements to IFRSs issued in May 2008 to clarify the scope of
IAS 34.

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14

An interim financial report is prepared on a consolidated basis if the entitys

most recent annual financial statements were consolidated statements. The
parents separate financial statements are not consistent or comparable with the
consolidated statements in the most recent annual financial report. If an
entitys annual financial report included the parents separate financial
statements in addition to consolidated financial statements, this Standard
neither requires nor prohibits the inclusion of the parents separate statements
in the entitys interim financial report.

Significant events and transactions

15

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 entitys 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)

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 entitys 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;

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(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

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 entitys 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.

16

[Deleted]

Other disclosures
16A

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In addition to disclosing significant events and transactions in

accordance with paragraphs 1515C, 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. 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 entitys interim financial report only
if IFRS 8 Operating Segments requires that entity to disclose
segment information in its annual financial statements):

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(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.

(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 entitys 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)

for financial instruments, the disclosures about fair value required

by paragraphs 9193(h), 9496, 98 and 99 of IFRS 13 Fair Value
Measurement and paragraphs 25, 26 and 2830 of 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 disaggregation of revenue from contracts with customers

required by paragraphs 114115 of IFRS 15 Revenue from Contracts
with Customers.

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17
18

[Deleted]

Disclosure of compliance with IFRSs

19

If an entitys 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 IFRSs unless it complies with all the
requirements of IFRSs.

Periods for which interim financial statements are

required to be presented
20

Interim reports shall include interim financial statements (condensed 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)

statements of profit or loss and other comprehensive income for

the current interim period and cumulatively for the current
financial year to date, with comparative statements of profit or
loss and other comprehensive income for the comparable interim
periods (current and year-to-date) of the immediately preceding
financial year. As permitted by IAS 1 (as amended in 2011), an
interim report may present for each period a statement or
statements of profit or loss and other comprehensive income.

(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.

21

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.

22

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
23

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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

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materiality, it shall be recognised that interim measurements may rely on
estimates to a greater extent than measurements of annual financial
data.
24

IAS 1 and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors define
an item as material if its omission or misstatement could influence the
economic decisions of users of the financial statements. IAS 1 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.

25

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 entitys financial position and
performance during the interim period.

Disclosure in annual financial statements

26

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 for that financial year.

27

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. Paragraph 16A(d) 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 scoperelating only to the change in estimate. An entity is not
required to include additional interim period financial information in its
annual financial statements.

Recognition and measurement

Same accounting policies as annual
28

An entity shall 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 an entitys reporting (annual,

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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.
29

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 entitys 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.

30

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. 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;

(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.

31

Under the Framework for the Preparation and Presentation of Financial Statements (the
Framework),3 recognition is the process of incorporating in the balance sheet or
income statement an item that meets the definition of an element and satisfies
the criteria for recognition. The definitions of assets, liabilities, income, and
expenses are fundamental to recognition, at the end of both annual and interim
financial reporting periods.

32

For assets, the same tests of future economic benefits apply at interim dates and
at the end of an entitys financial year. Costs that, by their nature, would not

IASCs Framework for the Preparation and Presentation of Financial Statements was adopted by the IASB in
2001. In September 2010 the IASB replaced the Framework with the Conceptual Framework for Financial
Reporting.

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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.
33

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 Framework says that
expenses are recognised in the income statement when a decrease in future
economic benefits related to a decrease in an asset or an increase of a liability
has arisen that can be measured reliably [The] Framework does not allow the
recognition of items in the balance sheet which do not meet the definition of
assets or liabilities.

34

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.

35

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 26
require, however, that the nature and amount of any significant changes in
estimates be disclosed.

36

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

37

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
entitys financial year.

38

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.

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Costs incurred unevenly during the financial year

39

Costs that are incurred unevenly during an entitys 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

40

Part B of the illustrative examples accompanying this Standard provides

examples of applying the general recognition and measurement principles set
out in paragraphs 2839.

Use of estimates
41

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 financial information that is relevant 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.

42

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

43

44

A1190

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 of the

current financial year and the comparable interim periods of any
prior financial years that will be restated in the annual financial
statements in accordance with IAS 8; or

(b)

when it is impracticable 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 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

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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.
45

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
46

This Standard becomes operative for financial statements covering periods

beginning on or after 1 January 1999. Earlier application is encouraged.

47

IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In
addition it amended paragraphs 4, 5, 8, 11, 12 and 20, deleted paragraph 13 and
added paragraphs 8A 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.

48

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.

49

Paragraphs 15, 27, 35 and 36 were amended, paragraphs 15A15C and 16A were
added and paragraphs 1618 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.

50

IFRS 13, issued in May 2011, added paragraph 16A(j). An entity shall apply that
amendment when it applies IFRS 13.

51

Presentation of Items of Other Comprehensive Income (Amendments to IAS 1), issued in

June 2011, amended paragraphs 8, 8A, 11A and 20. An entity shall apply those
amendments when it applies IAS 1 as amended in June 2011.

52

Annual Improvements 20092011 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
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.

53

Annual Improvements 20092011 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.

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54

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.

55

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.

56

Annual Improvements to IFRSs 20122014 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
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.

57

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.

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