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CA Intermediate · Advanced Accounting · AS 25 Interim Financial Reporting

Zenith Textiles Ltd, a listed company with an April–March financial year, decides to publish a half-yearly interim financial report as at 30 September 2026 under AS 25. The finance head wants to include only a condensed balance sheet and a condensed statement of profit and loss, to keep the report short. Which statement is correct?

An interim financial report under AS 25 must contain, at minimum, a condensed balance sheet, a condensed statement of profit and loss, a condensed cash flow statement and selected explanatory notes. Omitting the cash flow statement or notes is not allowed, though the full annual set is not needed.

  1. AThe two statements proposed are enough, because cash flow statements are needed only in annual reports
  2. BThe report must also include a condensed cash flow statement and selected explanatory notesCorrect
  3. CThe report must include the full annual set of statements with all the annual disclosures
  4. DOnly the condensed statement of profit and loss is mandatory; the other components are optional

Explanation

AS 25 prescribes the minimum components of an interim report: condensed balance sheet, condensed statement of profit and loss, condensed cash flow statement and selected explanatory notes. Leaving out the cash flow statement therefore breaches the Standard. The Standard does not require the full annual set, since condensed statements are permitted.

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