Interim and Segmental Reporting
THIS CHAPTER DISCUSSES the requirements for preparing interim financial statements and segmental disclosures included in the annual report.
What should be reported and disclosed in interim periods?
Interim reports may be issued periodically, such as quarterly or monthly. Complete financial statements or summarized data may be provided, but interim financial statements do not have to be certified by the outside auditors.
Interim balance sheets and cash flow information should be given. If these statements are not presented, material changes in liquid assets, cash, long-term debt, and stockholders' equity should be disclosed.
Interim reports typically include results of the current interim-period and the cumulative year-to-date figures. Usually comparisons are made to the results of comparable interim periods for the previous year.
Interim results should be based on the accounting principles used in the preceding year's annual report unless a change has been made in the current year.
A gain or loss cannot be deferred to a later interim period except if such deferral would have been allowable for annual reporting.
Revenue from merchandise sold and services performed should be accounted for as earned in the interim period in the same manner as in annual reporting. If an advance is received in the first quarter and benefits the whole year, it should be allocated ratably to the interim periods affected.
Expenses should ...