IAS 34 ‘Interim Financial Reporting’ – New Pocket guide

IAS 34 ‘Interim Financial Reporting’ is applicable when an entity chooses to prepare an interim financial report. It doesn’t mandate which entities should be required to publish interim financial reports, how frequently, or how soon after the end of an interim period.

This standard allows for a reduced level of information to be presented compared to annual financial statements.

The standard establishes guidelines for recognizing, measuring, and disclosing financial data in interim reports. Reports can include either a complete or condensed set of financial statements covering a period shorter than a financial year.


Entities reporting in accordance with IAS 34 are required to include in their interim financial reports, at a minimum, the following components:

  • A condensed statement of comprehensive income,
  • A condensed statement of financial position,
  • A condensed statement of cash flows,
  • A condensed statement of changes in equity, and
  • selected explanatory notes.  

Full compliance with IFRSs is required if a complete set of financial statements are being included in the interim report.


IAS 34 requires interim reports to include interim financial statements for the periods listed in the following table:

Statement of financial positionEnd of current interim periodEnd of immediately preceding financial year
Statement of profit and loss and other comprehensive incomeCurrent interim period and cumulatively for the current financial year-to-dateComparable interim period of immediately preceding financial year
Statement of changes in equityCumulatively for the current financial year-to-dateComparable year-to-date period of the immediately preceding financial year
Statement of cash flowsCumulatively for the current financial year-to-dateComparable year-to-date period of the immediately preceding financial year


The same accounting policies should be applied for interim reporting as are applied in the entity’s annual financial statements. The exception to this is accounting policy changes made after the date of the most recent annual financial statements that are to be reflected in the next annual financial statements.

Entities are required by IAS 34 to disclose in their interim financial reports that this requirement has been met.

A key provision of IAS 34 is that an entity should use the same accounting policy throughout a single financial year. If a decision is made to change a policy mid-year, the change is implemented retrospectively, and previously reported interim data is restated.


In preparing their interim financial reports, entities are required to apply the same accounting policies as applicable for next annual financial statements.

The Standard states that the frequency of an entity’s reporting (annual, half-yearly or quarterly) should not affect the measurement of its annual results. To achieve that objective, measurements for interim reporting purposes are made on a year-to-date basis.

Several important measurement points to consider are as follows:


Costs that are incurred unevenly during an entity’s financial year shall be anticipated or deferred for interim reporting purposes if, and only if, it is also appropriate to anticipate or defer that type of cost at the end of the financial year.


Revenues that are received seasonally, cyclically or occasionally within a financial year should not be anticipated or deferred as of an interim date, if anticipation or deferral would not be appropriate at the end of the financial year.


Measurement procedures used in interim financial reports should produce information that is reliable, with disclosure of all material relevant financial information.

The standard acknowledges that interim reports generally will require a greater use of estimation methods than annual financial reports.


Materiality is defined in IAS 1.

In deciding how to recognise, measure, classify, or disclose an item for interim financial reporting purposes, materiality should be assessed in relation to the interim period financial data.

In making assessments of materiality, it should be recognised that interim measurements may rely on estimates to a greater extent than measurements of annual financial data. (IAS 34:23)


The disclosure requirements of IAS 34 are designed with the understanding that readers of the interim financial report will already have access to the latest annual financial statements. Therefore, supplementary notes found in the annual financial statements need not be duplicated in the interim reports. Instead, the explanatory notes accompanying the interim report aim to offer insights into significant events and transactions since the last annual reporting period.

IAS 34:16 sets out a list of the minimum explanatory notes required to be included in the interim financial statements.


If you have a specific question around the application of IAS 34, please e-mail Ask@projectaccountants.co.uk or visit www.projectaccountants.co.uk. For updates, please follow us on Linkedin

Project Accountants for Audit Coordination & Management



JKL LIMITED requires professional accounting services to efficiently manage, and coordinate audit conducted by an external audit firm. The company aims to ensure compliance with regulatory requirements, maintain accurate financial records, and provide transparency to stakeholders.


Complexity of Audit Process

JKL LIMITED faces challenges in navigating the complexities of the audit process, including preparing necessary documentation, addressing audit queries, and managing timelines.

Limited Internal Resources

The company has limited internal accounting resources, making it difficult to dedicate the required time and expertise to handle audits effectively.

Regulatory Compliance

Ensuring compliance with accounting standards (including IFRS, FRS 102, US GAAP, Lux GAAP, HKFRS, etc), regulations, and reporting requirements is crucial for JKL LIMITED, but it can be time-consuming and challenging without professional assistance.


JKL LIMITED engages Project Accountants specializing in audit coordination and management. JKL LIMITED is allocated an experienced relationship manager by Project Accountants as part of the following solutions to address the above challenges:


Reviewing financial records

Project Accountants conduct a review of JKL LIMITED’s financial statements, ensuring accuracy and completeness.

Compliance assessment

They assess the company’s compliance with relevant accounting standards, regulations, and reporting requirements.

Technical memos

Project Accountants assist in organising and preparing all necessary documentation including technical memos (such as going concern, the impact of the first-time adoption of new accounting standards, key judgments, etc) required for the audit process.


Audit planning

Project Accountants collaborate with JKL LIMITED to develop an audit plan, identifying key areas of focus, objectives, and timelines.

Liaison with auditors

They act as the primary point of contact between JKL LIMITED and the external auditing firm, coordinating all communication and information requests.

Query management

Project Accountants assist in addressing audit queries promptly, ensuring accurate and comprehensive responses.

Follow-up and tracking

They closely monitor the progress of the audit, ensuring timely completion and resolving any bottlenecks that may arise.

Financial reporting

Project Accountants help JKL LIMITED in preparing accurate and timely financial statements, ensuring compliance with regulatory guidelines.


Streamlined Audit Process

Project Accountants streamline the audit process for JKL LIMITED, ensuring efficient coordination, accurate documentation, and timely responses to auditors’ queries.

Time and Resource Savings

Outsourcing audit coordination and management to Project Accountants frees up internal resources at JKL LIMITED, allowing them to focus on core business activities.

Improved Stakeholder Confidence

By demonstrating transparency, accuracy, and adherence to regulatory standards, JKL LIMITED enhances stakeholder confidence and meets relevant audit timelines.


Project Accountants play a vital role in helping JKL LIMITED effectively manage and coordinate audits. Their expertise, pre-audit preparation, audit coordination, compliance assistance, and streamlined processes lead to efficient and successful audit outcomes while minimising the burden on the client’s internal resources.

IAS 8 – New Pocket guide

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors is applied in selecting and applying accounting policies, accounting for changes in estimates and reflecting corrections of prior period errors.

Accounting Policies

IAS 8 defines accounting policies as the specific principles, bases, conventions, rules, and practices applied by an entity in preparing and presenting financial statements.

Once an entity has selected its accounting policies, it will apply the selected accounting policies consistently for similar transactions, unless a Standard or an Interpretation requires different policies to be applied.

IAS 8 allows the selection and application of accounting policies:

  • If a standard or interpretation deals with a transaction, use that standard or interpretation
  • If no standard or interpretation deals with a transaction, judgment should be applied. The following sources should be referred to, to make the judgment:
  • Requirements and guidance in other standards/interpretations dealing with similar issues
  • Definitions, recognition criteria in the framework
  • May use other GAAP that use a similar conceptual framework and/or may consult other industry practice/accounting literature that is not in conflict with standards/interpretations

IAS 8 permits accounting policies to be changed when there is a change in the International Financial Reporting Framework, Change in local legislation, or for true and fair view of financial statements.

Accounting Treatment of Change in Accounting Policy

If change is due to new standard/interpretation, apply transitional provisions. If there are no transitional provisions, apply retrospectively.

When a change is applied retrospectively, the entity shall adjust the opening balances of each affected component of equity for the earliest prior period presented and the other comparative amounts disclosed for each prior period presented as if the new policy has always been applied.

However, when it is impractical to determine period-specific effects or cumulative effects of the change, then retrospectively application to the earliest period that is practicable is permitted.


Refer Paragraphs: IAS 8: 28 – 31

Accounting estimate

A change in an accounting estimate is an adjustment of the carrying amount of an asset or liability, or related expense, resulting from reassessing the expected future benefits and obligations associated with the asset or liability.

When an item of financial statements cannot be measured precisely, it can only be estimated. This is because of:

  • Uncertainties inherent in the business;
  • Where judgments are involved.

Change in accounting estimates becomes necessary as a result of new information or new development.

Accounting treatment of Change in Accounting Estimate

Change is recognised prospectively in profit or loss in the period of change, if it only affects that period; or period of change and future periods (if applicable).


Refer Paragraph IAS 8: 39 – 40


Prior period errors are omissions from, and misstatements in, an entity’s financial statements for one or more prior periods arising from failure to use/misuse of reliable information that:

  • Was available when the financial statements for that period were issued
  • Could have been reasonably expected to be taken into account in those financial statements.

Errors include:

  • Mathematical mistakes
  • Mistakes in applying accounting policies
  • Oversights and misinterpretation of facts

Accounting treatment of Errors

An entity shall correct material prior period errors retrospectively in the first set of financial statements authorised for issue after their discovery by:

  • Restating the comparative amounts for the prior period(s) presented in which the error occurred; or
  • If the error occurred before the earliest prior period presented, where practicable, restating the opening balances of assets, liabilities, and equity for the earliest prior period presented.


Refer Paragraph IAS 8: 49


If you have a specific question about the application of IAS 8, please reach out to Ask@projectaccountants.co.uk or visit www.projectaccountants.co.uk.