Icai Unveils Interim Report Exposure Draft

The accounting standards board of the Institute of Chartered Accountants of India (ICAI) has issued the exposure draft on 'interim financial reporting', which aims to prescribe the minimum content of an interim financial report to be made by enterprises.

The standard requires an interim financial report to include, at a minimum, condensed forms of balance sheet, profit and loss statement and cash flow statement, and selected explanatory notes.

According to an ICAI statement, the proposed accounting standard also seeks to prescribe the principles for recognition and measurement, in a complete or condensed financial statement, for an interim period.

This would come handy to investors and creditors and help them understand an enterprise's capacity to generate earnings and cash flows.

The standard, however, does not mandate two things: which enterprises should present interim financial reports and how frequently, or how soon, after an interim period the enterprises should do it.

If an enterprise is required to prepare and present an interim financial report, it should comply with this standard.

The standard says that a statute or a regulator may require an enterprise to prepare and present certain information at an interim date which may be different in form and content as required by the standard. In such cases, the standard provides the recognition and measurement principles as laid down in it, unless otherwise specified in the statute or by the regulator.

The exposure draft would be finalised for the consideration and approval of the ICAI council after considering the comments received on it. The final accounting standard on the subject will be issued subsequently.