Skip to content

Advanced Accounting · AS 25 Interim Financial Reporting

Content of an Interim Financial Report (AS 25)

Updated 4 October 2026 · Fact-checked

Under AS 25, an interim financial report must contain at least a condensed balance sheet, condensed statement of profit and loss, condensed cash flow statement and selected explanatory notes. Condensed statements keep every heading and subtotal of the last annual statements. Basic and diluted EPS appear on the face of the profit and loss statement. Present the right comparative periods.

Understand Content of an Interim Financial Report

An interim financial report covers a period shorter than a full financial year, such as a quarter or half-year. AS 25 does not say who must publish one. Other rules, such as SEBI listing norms, decide that. AS 25 only says what the report must contain once it is prepared.

The minimum content has four parts: a condensed balance sheet, a condensed statement of profit and loss, a condensed cash flow statement and selected explanatory notes. The idea is timeliness. Readers want an update, not a full annual report repeated every quarter.

Condensed does not mean you may choose headings freely. The condensed statements must include every heading and subtotal that appeared in the most recent annual financial statements. You add extra line items or notes only if leaving them out would make the statements misleading. If the enterprise instead publishes a complete set of financial statements in its interim report, the form and content must follow AS 1 for a complete set.

The notes should explain events and changes since the last annual reporting date, so they update the annual report rather than repeat it. They are given on a financial year-to-date basis. Basic and diluted EPS must be shown on the face of the statement of profit and loss for the interim period, whether that statement is complete or condensed. If the annual statements are consolidated, the interim report is also prepared on a consolidated basis.

Comparatives are a favourite exam point. The balance sheet is compared with the end of the immediately preceding financial year, not with the same date last year. Profit and loss and cash flow are compared with the comparable periods of the preceding year.

Key rules to remember

Minimum components
Condensed balance sheet + condensed statement of profit and loss + condensed cash flow statement + selected explanatory notes
All four are needed as a minimum. If a complete set of statements is published, AS 1 form and content apply.
Condensed statement rule
Condensed statement = all headings and subtotals of the most recent annual statements (+ extra line items or notes only if omission would be misleading)
Add extra items only if omitting them would make the statements misleading.
Comparative balance sheet
Balance sheet at end of current interim period vs balance sheet at end of the immediately preceding financial year
Not the same date of the previous year.
Comparative profit and loss
Current interim period and financial year-to-date vs comparable interim period and year-to-date of the preceding year
For a half-year report, the current period and year-to-date are the same six months, so one pair of columns is enough.
Comparative cash flow
Cumulative year-to-date vs comparable year-to-date period of the preceding financial year
Cash flow is shown cumulatively, not for the quarter alone.
Interim EPS
Basic EPS = (Net profit for the interim period − preference dividend) ÷ Weighted average equity shares for the interim period
Basic and diluted EPS go on the face of the profit and loss statement. Do not annualise the figure.
Selected notes checklist
Policies; seasonality; unusual items; changes in estimates; debt and equity issues or repayments; dividends; segment data; subsequent events; changes in enterprise composition; contingent liabilities
Use this ten-item list to recall the notes. Give them on a year-to-date basis.

How to solve Content of an Interim Financial Report questions

Use this method for any question on what an interim report must contain, how to present it, or which disclosures are needed.

  1. 1Identify the period and the financial year end. Work out whether the report is for a quarter or a half-year and what the year-to-date period is.
  2. 2List the four minimum components: condensed balance sheet, condensed profit and loss, condensed cash flow and selected explanatory notes. If the question says a complete set is published, apply AS 1 instead.
  3. 3Decide the comparatives. Balance sheet against the last year end. Profit and loss and cash flow against the comparable periods of the previous year.
  4. 4For condensed statements, state that all headings and subtotals of the latest annual statements are kept. Add extra items only if omission would mislead.
  5. 5Go through the given facts one by one and match each to the notes checklist. Ignore routine items that fit none of the heads.
  6. 6Put basic and diluted EPS on the face of the profit and loss statement. Compute it for the interim period only, without annualising.
  7. 7If the annual statements are consolidated, say that the interim report is also consolidated.
  8. 8Write a clear conclusion that links each fact to the required component or disclosure.

Quickest way: Four-part check plus note checklist

When to use it: Use it for MCQs and short written answers when time is tight.

  1. MCQ: look for the option that lists all four components: balance sheet, profit and loss, cash flow and notes. Options that drop the cash flow statement or the notes are wrong.
  2. MCQ: if an option says the balance sheet is compared with the same date last year, eliminate it. The comparison is with the preceding financial year end.
  3. MCQ: if an option says EPS can be left out of condensed statements, eliminate it. EPS is on the face of the profit and loss.
  4. Written: open with one line naming the four components, then one line on condensed headings and subtotals.
  5. Written: list the notes in a short numbered list, one line each, tied to the facts in the question. Each correct item earns a separate mark.
  6. Written: close with EPS and the comparatives. Show the EPS working so you earn step marks.

Common mistakes in Content of an Interim Financial Report

  • Leaving out the condensed cash flow statement and listing only balance sheet, profit and loss and notes.

    Students remember quarterly results as two statements.

    Fix: Remember all four: BS, P&L, cash flow and notes. A cash flow statement is part of the AS 25 minimum.

  • Comparing the interim balance sheet with the balance sheet of the same date in the previous year.

    Students assume every statement uses the same comparison rule.

    Fix: Balance sheet: compare with the end of the immediately preceding financial year. Profit and loss and cash flow: compare with comparable periods of the previous year.

  • Dropping headings or subtotals in the condensed statements because they are small.

    Students read 'condensed' as 'shortened as you like'.

    Fix: Keep every heading and subtotal of the latest annual statements. Add more items only if omission would mislead.

  • Annualising interim EPS, for example doubling the half-year EPS.

    Students want to compare with annual EPS.

    Fix: Compute EPS for the interim period using the weighted average shares for that period. Do not annualise.

  • Listing routine items as disclosures in the selected notes.

    Students try to write everything for more marks.

    Fix: Disclose only items that fit the notes checklist, such as unusual items, changes in estimates, dividends and contingent liability changes. Routine items need no note.

  • Giving notes on a quarter-only basis instead of year-to-date.

    Students focus on the latest three months.

    Fix: Present the explanatory notes on a financial year-to-date basis.

Worked examples

Example 1

A company has the financial year 1 April 2026 to 31 March 2027. It prepares an interim report for the quarter ended 30 September 2026 (the second quarter). State the minimum statements and the periods and dates to be presented.

Show the solution
  1. Identify the periods. The current interim period is the three months ended 30 September 2026. The year-to-date period is the six months from 1 April 2026 to 30 September 2026.
  2. Minimum components: condensed balance sheet, condensed statement of profit and loss, condensed cash flow statement and selected explanatory notes.
  3. Balance sheet: show it as at 30 September 2026, with comparative as at 31 March 2026, the end of the immediately preceding financial year.
  4. Profit and loss: show the three months ended 30 September 2026 and the six months ended 30 September 2026. The comparatives are the three months ended 30 September 2025 and the six months ended 30 September 2025.
  5. Cash flow: show the cumulative six months ended 30 September 2026, with comparative for the six months ended 30 September 2025.
  6. Add basic and diluted EPS on the face of the profit and loss statement, and the selected explanatory notes on a year-to-date basis.

Answer: Four components. Balance sheet at 30 September 2026 vs 31 March 2026. Profit and loss for three months and six months ended 30 September 2026 vs the same periods of 2025. Cash flow for six months ended 30 September 2026 vs six months ended 30 September 2025.

Example 2

For the half-year ended 30 September 2026, Zeta Ltd reports net profit after tax of ₹90,00,000. It must pay preference dividend of ₹10,00,000 for the half-year. The weighted average number of equity shares for the half-year is 16,00,000. The same accounting policies are followed as in the last annual statements. During the half-year the company paid an interim equity dividend of ₹2 per share and had a fire loss of ₹25,00,000 that is unusual in size. Compute basic EPS and state the items to be disclosed in the selected explanatory notes.

Show the solution
  1. Earnings for equity shareholders = ₹90,00,000 − ₹10,00,000 = ₹80,00,000.
  2. Basic EPS = ₹80,00,000 ÷ 16,00,000 = ₹5.00 per share for the half-year. Do not annualise it.
  3. Show basic EPS (and diluted EPS, if any dilutive potential equity shares exist) on the face of the statement of profit and loss.
  4. Note 1: a statement that the same accounting policies and methods of computation are followed as in the most recent annual financial statements.
  5. Note 2: the nature and amount of the fire loss of ₹25,00,000, as an item unusual because of its size or nature.
  6. Note 3: dividends paid, shown as ₹2 per equity share. The aggregate is not worked out here, because dividend is paid on shares outstanding at the record date, not on the weighted average number, and that number is not given.
  7. The facts mention no seasonality, segment data or changes in estimates, so no further notes are needed.

Answer: Basic EPS for the half-year is ₹5.00. Selected notes: same accounting policies, unusual fire loss of ₹25,00,000 and the interim equity dividend of ₹2 per equity share.

Exam tips

  • Begin written answers by naming the four components. This usually earns the first mark quickly.
  • Always state the comparative periods in a presentation question. Examiners reward the balance sheet versus last year end distinction.
  • In note-listing questions, match each fact in the question to a head in the checklist. Do not add notes the facts do not support.
  • Show the EPS working in steps: earnings, shares, division. Write the result as 'for the period' to avoid annualising.
  • In MCQs, watch for options that omit the cash flow statement, put comparatives against the wrong date or leave EPS out. These are the common wrong options.

Practice questions from AS 25 Interim Financial Reporting

Content of an Interim Financial Report in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Content of an Interim Financial Report: frequently asked questions

What are the minimum components of an interim financial report under AS 25?

At least four: a condensed balance sheet, a condensed statement of profit and loss, a condensed cash flow statement and selected explanatory notes. If the enterprise publishes a complete set of financial statements instead, the form and content must follow AS 1.

What does condensed mean in AS 25?

Condensed statements must include each heading and subtotal that was in the most recent annual financial statements. You may add extra line items or notes only if leaving them out would make the statements misleading.

Is EPS required in an interim financial report?

Yes. Basic and diluted EPS must be presented on the face of the statement of profit and loss for the interim period, whether that statement is complete or condensed. The figure is for the interim period and is not annualised.

Which comparatives must be given in an interim report?

The balance sheet is compared with the end of the immediately preceding financial year. The profit and loss statement is compared with the comparable interim period and year-to-date of the previous year. The cash flow statement is shown cumulatively for the year to date and compared with the comparable year-to-date period of the previous year.