A complete or condensed financial report/ financial statement that is prepared for a period shorter than a financial year (accounting year), i.e., an interim period. The need for an interim financial statements arises from the fact specific type of companies (publicly held companies) experience an ongoing changes in performance that have to be reported to the users and stakeholders on a frequent basis. This typically includes the issuance of three quarterly sets of financials in a year. It is meant to provide timely and more reliable financial information all in relation to the ability of an entity to generate earnings and cash flows, as well as indicators such as liquidity, financial strength, etc.
A set of interim financial statements usually lays down a minimum set of components, which are:
- a condensed statement of financial position (SFP).
- a condensed statement of comprehensive income (SCI) or and/ or a condensed statement of income.
- a condensed statement of changes in equity.
- a condensed statement of cash flows.
- a subset of relevant explanatory notes (footnotes).
Practically, condensed financial statements include headings and subtotals appearing in the most recent annual financials and the footnotes.
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