Wiley GAAP: Practical Implementation Guide and Workbook

Chapter 21. INTERIM REPORTING (ASC 270)

OBJECTIVE

The purpose of ASC 270, Interim Reporting, is to provide guidance on accounting and disclosure requirements for interim financial reports of publicly traded companies.

U.S. generally accepted accounting principles (GAAP) itself does not mandate interim financial reporting; however, the Securities and Exchange Commission (SEC) requires public companies to file quarterly financial information on Form 10-Q, which is due no later than 45 days after period-end (with shorter filing deadlines for larger entities).

DEFINITIONS OF KEY TERMS

Interim period. A financial reporting period shorter than a full financial year.

Interim financial report. A financial report that contains either a complete or condensed set of financial statements for an interim period.

Liquidation of LIFO inventories. A last-in, first-out (LIFO) liquidation occurs in an interim period when units sold during that period exceed the number of units purchased during that same period. This results in costs associated with one or more previous years' LIFO layers being released into cost of goods sold.

Seasonality. The normal, expected occurrence of a major portion of revenues or costs in the same one or two interim periods (on a consistent basis from year to year).

FORM AND CONTENT OF INTERIM REPORTS

ASC 270 defines the minimum content of an interim financial report as including condensed financial statements and selected explanatory notes. An entity should establish the level of ...