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

Rohini Steel Ltd reports quarterly. The CFO claims that if the company moves from half-yearly to quarterly reporting, its annual profit may legitimately change because measurement can be done quarter by quarter on a stand-alone basis. Which view conforms to Ind AS 34?

The frequency of reporting, whether annual, half-yearly or quarterly, must not affect measurement of annual results. To achieve this, interim measurements are made on a year-to-date basis, so the CFO's claim that quarterly stand-alone measurement may change annual profit is incorrect.

  1. AAnnual results may differ as quarterly reporting uses discrete-period measurement
  2. BAnnual results are unaffected only if the company reports half-yearly
  3. CThe frequency of reporting shall not affect measurement of annual results, so measurements are made on a year-to-date basisCorrect
  4. DMeasurements are made for each quarter in isolation and then summed

Explanation

Ind AS 34 states that the frequency of reporting (annual, half-yearly or quarterly) shall not affect the measurement of annual results. To achieve this, interim measurements are made on a year-to-date basis. Hence stand-alone quarter measurement that changes annual results is wrong.

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