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

Meghna Pharma Ltd reports half-yearly and quarterly. The auditor reminds the CFO that the frequency of reporting must not affect annual results, and queries the measurement basis for interim reporting. Meghna's team also wants to extend the goodwill impairment principle in the Appendix by analogy to reversal of impairment on other assets and to other conflicts between Ind AS 34 and other standards. Which view is correct?

Interim measurements are made on a year-to-date basis so reporting frequency does not affect annual results, and the Appendix principle on goodwill impairment must not be extended by analogy to other areas of potential conflict between Ind AS 34 and other Indian Accounting Standards.

  1. AMeasure on a year-to-date basis, and do not extend the Appendix principle by analogy to other areas of potential conflictCorrect
  2. BMeasure each interim period in isolation, and extend the principle by analogy to other conflicts
  3. CMeasure on a year-to-date basis, and extend the principle by analogy to all other conflicts
  4. DMeasure each interim period in isolation, and do not extend the principle by analogy

Explanation

Ind AS 34 states that the frequency of reporting shall not affect annual results, so measurements are made on a year-to-date basis. The Appendix states an entity shall not extend its accounting principle by analogy to other areas of potential conflict between Ind AS 34 and other standards. The other options each get one of the two elements wrong.

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