FAR 1-5: Interim Financial Reporting

Question 1

What are the guidelines for interim reporting?

Answer 1

• Use same accounting principles that were used in the most recent annual report
• Allocate expenses to the interim period benefited
• Revenues are recognized in the period in which they are earned & realized or realizable
• A total for comprehensive income in condensed financial statements of interim periods

Question 2

What income tax rate is used in interim financial reporting?

Answer 2

Use best estimate of effective tax rate to be applicable for full fiscal year on quarterly statements