Interim Financial Reporting Flashcards
matching of revenues/expenses
done by quarter in interim reporting
interim financial reporting
GAAP vs IFRS
not required (but SEC does) prepared same way as previous annual F/S
GAAP, allows modification of certain principles in preparing interim F/S
IFRS, presentation minimum requirements
- condensed B/S
- condensed statements of comprehensive income
- condensed statements of changes in equity
- condensed statements of cash flow
timeliness vs reliability
timeliness emphasized over reliability
marked unauditied
income tax expense
GAAP vs IFRS
YTD income x estimated effective tax rate for year (best/most current)
- provision for taxes in previous quarter
GAAP, allows use of enacted tax rates ONLY
IFRS, allows effective tax rate to be estimated using enacted OR substantially enacted changes in tax rates
interim inventory valuation
any method used other than method used for annual inventory valuation must be disclosed in interim F/S
market value changes in inventory
permanent losses from declines should be reflected
any increases in subsequent periods are recognized only up to losses previously recognized
temporary market declines expected to reverse by year-end is NOT recognized
seasonal revenue variations
disclosed in interim F/S
unusual and infrequent transactions
if material and not designated as extraordinary items under GAAP, report separately
include in net income and disclosed in notes to interim F/S
disclosure requirements
GAAP vs IFRS
GAAP: requires disclosure in note to annual F/S of Q4 activity related to changes in accounting principle, discontinued operations, extraordinary, unusual, or infrequent IF a SEPARATE report is not published in Q4
IFRS: requires nature and amount of change in estimate made in Q4 to be disclosed in annual F/S if no separate report is published in Q4
