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

Kaveri Textiles Ltd reports half-yearly. Its CFO argues that because half-yearly reporting is less frequent than quarterly reporting, the entity may measure interim items on a standalone-period basis, so the annual result would differ depending on reporting frequency. Under Ind AS 34, which view is consistent with the standard?

Interim measurements must be made on a year-to-date basis, using the same accounting policies as annual statements. This ensures that whether an entity reports annually, half-yearly or quarterly, the frequency of reporting does not change the measurement of its annual results.

  1. AMeasurements for interim reporting must be made on a year-to-date basis so that reporting frequency does not affect annual resultsCorrect
  2. BHalf-yearly reporters may measure each period standalone, while quarterly reporters use year-to-date
  3. CAnnual results may be adjusted for reporting frequency if the auditor agrees
  4. DInterim measurements may follow different accounting policies from annual statements if the period is short

Explanation

Ind AS 34 requires the same accounting policies in interim statements as in annual statements. It states that the frequency of reporting (annual, half-yearly or quarterly) shall not affect measurement of annual results, so interim measurements are made on a year-to-date basis. The standalone-period view contradicts this.

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