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CA Final · Financial Reporting · Ind AS 34 Interim Financial Reporting

Himalaya Foods Ltd reports quarterly. Its management argues that if it moved from quarterly to half-yearly reporting, it could use different measurement bases, so that annual profit would be lower. Which statement from Ind AS 34 best rebuts this argument?

Reporting frequency, whether annual, half-yearly or quarterly, must not affect the measurement of annual results. To achieve this, Ind AS 34 requires measurements for interim reporting to be made on a year-to-date basis using the same accounting policies as the annual statements.

  1. AThe frequency of an entity's reporting shall not affect the measurement of its annual results, and interim measurements are made on a year-to-date basisCorrect
  2. BInterim measurements are made on a discrete-period basis so that each quarter stands alone
  3. CHalf-yearly reports may use accounting policies different from annual statements to reduce effort
  4. DThe measurement of annual results depends on whether the interim report is complete or condensed

Explanation

Ind AS 34 requires the same accounting policies as the annual statements and states that reporting frequency shall not affect measurement of annual results; to achieve this, interim measurements are made on a year-to-date basis. The discrete-period option is the opposite of this requirement.

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