In accordance with the "Basic Standard of Enterprise Accounting Standards," the Ministry of Finance issued Accounting Standards for Business Enterprises No. 32 — Interim Financial Reporting on 2006/2/15, effective as of 2007/1/1.
1. Overview of Guidelines
This standard prescribes the content of interim financial reports and the recognition and measurement principles to be applied in their preparation. An interim financial report is a financial report prepared on the basis of an accounting period shorter than a full fiscal year.
Types of Interim Financial Reports
- • Monthly Report
- • Quarterly Report
- • Semiannual Report
II. Contents of Interim Financial Reports
Basic Components
- • Balance Sheet
- • Income Statement
- • Cash Flow Statement
- • Note
Simplify requirements
The interim balance sheet, income statement, and cash flow statement, along with their accompanying notes, shall be prepared in accordance with the same principles as annual financial statements. Notes to interim financial reports shall be based on the period from the beginning of the year to the end of the current interim period, disclosing significant transactions or events occurring after the balance sheet date of the prior year that are essential for understanding changes in the enterprise's financial position, results of operations, and cash flows.
3. Recognition and Measurement Principles
Core Principles
- • Enterprises shall use accounting policies in interim financial statements that are consistent with those used in annual financial statements.
- • Seasonal, periodic, or incidental revenue shall be recognized and measured when it occurs.
- Expenses that occur unevenly shall be recognized and measured when incurred.
- Expenses that do not occur evenly throughout the fiscal year shall be recognized and measured when incurred, except for accruals or deferrals permitted at the end of the fiscal year.
IV. Importance
When assessing materiality for recognizing, measuring, and reporting in interim periods, enterprises shall base their judgment on interim financial data and not on projected annual results. Determining the level of materiality requires professional judgment by accountants.
Comparative Financial Statements
For interim financial reporting, enterprises shall provide comparative interim financial statements from the prior year's corresponding period, as well as financial statements for the current interim period and from the beginning of the year to the end of the current interim period, to ensure comparability.
Regulatory Document Attachment
Accounting Standards for Business Enterprises No. 32 — Interim Financial Reporting (PDF)