Section 20 - Interim Financial Reporting

Question 1

What is interim financial reporting statements emphasizing (conceptually)?

Answer 1

Timeliness over reliability

Question 2

When computing income taxes at an interim date, which tax rate should be used?

Answer 2

Effective ANNUAL tax rate

Question 3

Is income tax expense estimated in each quarter?

Answer 3

Yes using the rate expected for the entire year

Question 4

Should inventory be written down at an interim date if it is EXPECTED to recover by the end of the year?

Answer 4

No

Question 5

Should inventory be written down at an interim date if it is NOT EXPECTED to recover by the end of the year?

Answer 5

Yes and write down should happen in the quarter the loss happened

Question 6

What items are allocated in all quarters for interim report?

Answer 6

• Property taxes
• Bonuses
• Depreciation

Question 7

What items are allocated in that quarter as it happens?

Answer 7

• inventory losses
• major expenses - unless benefit future quarters then allocate
• discontinued operations
• extraordinary gain/loss

Question 8

What is required for Form 10-Q?

Answer 8

1) Interim Balance Sheet
2) Interim Income Statement
3) Interim Statements of Cash Flows
4) Statement of changes in equity

Question 9

When are Form 10-Q due?

Answer 9

40 days after end of fiscal quarter for Accelerated and Large Accelerated Filers

45 days for Non-Accelerated Filers

Question 10

Is interim reporting required under IFRS?

Answer 10

No, however, if an entity chooses to issue them, they must include the following:

1) State of Financial Position
2) Statements of Profit or loss and Other Comprehensive Income
3) Statement of changes in equity
4) Statement of Cash Flows
5) Selected Notes