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

Mahesh Pharma Ltd reports quarterly. Its management argues that because it reports every quarter, it may apply simpler accounting policies in interim statements than in annual statements. Which view is consistent with Ind AS 34 as quoted in the Appendix on interim reporting and impairment?

Mahesh Pharma must apply the same accounting policies in its interim statements as in its annual statements. Ind AS 34 states that reporting frequency must not affect annual results, so measurement is done on a year-to-date basis, and condensed presentation does not justify different policies.

  1. ASimpler policies are allowed if disclosed, because interim reports are condensed
  2. BThe same accounting policies must be applied in interim statements as in annual statementsCorrect
  3. CPolicies may differ only for the first quarter of the year
  4. DPolicies may differ if the audit committee approves them

Explanation

Paragraph 28 of Ind AS 34 requires the same accounting policies in interim financial statements as in annual financial statements. Reporting frequency must not affect the measurement of annual results, so measurements are made on a year-to-date basis. Allowing simpler policies would contradict this.

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