interim financial statements are financial statements that cover a period of less than one year.

The
concept is most commonly applied to publicly-held companies, which must issue these statements
at quarterly intervals.
Purpose: to provide timely financial information for investment decision making
Interim financial statements Basic recognition of income Basic accounting policy reporting in
interim periods, Presentation of classification of assets as current and non-current, and liabilities
as short-term and long-term.
Charge and Cost
Companies that conduct inventory valuation based on standard costs do not need to report
deviations or differences with actual costs incurred, if the difference in costs is not material or is
expected to be completed by the end of the year. The effects of unplanned and unpredictable
irregularities must be reported at the end of the interim period.
Extraordinary items In determining materiality, extraordinary items must be directly related to
estimated annual income.
Accounting changes
Elimination of business segments, business combinations, extraordinary items, and unusual
and non-frequent events must be charged in the interim period when they occur and may not be
charged to other periods.
Outposts must be separately disclosed and included in the interim period's income
statement when extraordinary items occur. In determining materiality, extraordinary items must
be directly related to estimated annual income.
Unusual and uncommon events or events that have a material effect on operating results
but cannot be grouped in extraordinary items must also be reported and disclosed separately in the
interim period income statement.
Interim financial statements include balance sheets, income statements and interim earnings
balances, cash flow statements and notes to financial statements. The interim financial statements
must be presented comparatively with the same period the previous year.