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What Is An Interim Statement?: Key Takeaways

An interim statement is a financial report covering a period of less than one year that is used to convey a company's performance between annual reporting periods. Unlike annual statements, interim statements do not need to be audited. They increase communication between companies and investors by providing more frequent, up-to-date financial information. Common interim statements include quarterly reports, which provide financial data on a quarterly basis, allowing investors to track performance over time.

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76 views

What Is An Interim Statement?: Key Takeaways

An interim statement is a financial report covering a period of less than one year that is used to convey a company's performance between annual reporting periods. Unlike annual statements, interim statements do not need to be audited. They increase communication between companies and investors by providing more frequent, up-to-date financial information. Common interim statements include quarterly reports, which provide financial data on a quarterly basis, allowing investors to track performance over time.

Uploaded by

Pedro Delacruz
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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4:134:13
What Is an Interim Statement?
An interim statement is a financial report covering a period of less than one year.
Interim statements are used to convey the performance of a company before the
end of normal full-year financial reporting cycles. Unlike annual statements,
interim statements do not have to be audited. Interim statements increase
communication between companies and the public and provide investors with up-
to-date information between annual reporting periods.

These may also be referred to as interim reports.

KEY TAKEAWAYS

 Interim statements are financial reports produced by firms covering a


period of less than one year.
 The goal is to keep shareholders and analysts more up-to-date and in
regular communication with corporate management, and to alert the public
to material changes to the company in a timely fashion.
 Quarterly reports are commonly used by companies, and may sometimes
be mandated by the SEC.
Understanding Interim Statements
A quarterly report is an example of an interim statement because it is issued
before year end.

The International Accounting Standards Board (IASB) suggests certain standards


be included while preparing interim statements. These include a series of
condensed statements covering the company's financial position, income, cash
flows, and changes in equity along with notes of explanation.

The IASB also suggests that companies should follow the same guidelines in
their interim statements as they use in preparing their annual reports (which are
audited), including the use of similar accounting methods.

Interim statements offer a more timely look into a business’s operations, rather
than waiting until year-end statements, which do not officially become available
for months after year-end close anyway. Investors find the periodic snapshots
helpful when allocating investment capital – all of which leads to greater market
liquidity – a prime goal of capital markets.

These reports can also alert investors and analysts to recent changes that
meaningfully affect the corporation. A form 8-K, for instance, is used to report
unscheduled material events or corporate changes at a company that could be of
importance to the shareholders or the Securities and Exchange
Commission (SEC). The report notifies the public of events reported including
acquisition, bankruptcy, resignation of directors, or a change in the fiscal year.
Form 8-K reports may be issued based on other events up to the company's
discretion that the registrant considers to be of importance to shareholders.

Example: Quarterly Reports


The most common interim statement may be the quarterly report. A quarterly
report is a summary or collection of un-audited financial statements, such as
balance sheets, income statements, and cash flow statements, issued by
companies every quarter (three months). In addition to reporting quarterly
figures, these statements may also provide year-to-date and comparative (e.g.,
last year's quarter to this year's quarter) results. Publicly-traded companies must
file their reports with the Securities Exchange Commission. This form, known as
a 10-Q, does not include all the detailed information, such as background and
operations detail that the annual report (known as a 10-K) would.

The SEC also mandates that investment companies file quarterly reports if they
manage more than $100 million, using a form 13F.

Most companies have an accounting period that ends with the calendar year:
Dec. 31 and quarters that end on March 31, June 30, September 30, and
December 31. Quarterly reports are typically filed within a few weeks of a
quarter's end.

Finished goods inventory


Increased by 10,000
Net sales on credit 240,000
Net cash sales 60% of net sales
Collections 75%
Accounts payable ending 25% of
total credit purchases unpaid
All materials purchased for the
year are used but only 20% of
those are paid in cash upon
delivery. There are no
unfinished products in factory at
year-end.
The raw materials available for use
is amounted to
a. 336,000
b. 356,000
c. 406,000
d. 204,000
The manufacturing overhead
account is amounted to
a. 81,600
b. 136,000
c. 204,000
d. 68,000
END
“I can do all things through
Christ who strengthens me.”
–ians 4:

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