Interim Financial Statements

Question 1

What types of transactions are allocated to all quarters in interim financial statements?

Answer 1

Property Taxes, Bonuses, Depreciation, and Income Tax Expenses

Question 2

What types of transactions are NOT allocated to all quarters in interim financial statements?

Answer 2

Inventory losses, major expenses*, discontinue operations, extraordinary gain/loss

*Unless benefits future quarters

Question 3

How are period losses treated that are expected to be recovered?

Answer 3

When there is a loss in inventory, recognize it all in the quarter in which the loss occurs

• Exception is when the loss is expected to be recovered by the end of the 4th quarter, then no loss is recognized
• If it was expected that the loss would be recovered in Q4, but the loss was not recovered, then recognized the previous inventory loss in Q4.