Abstract

An interim financial report is intended to provide an update of the last annual report. IAS 34 is
based on the presumption that interim financial statements are essentially an extension of
the previous annual financial statements to which anyone who reads the entitys interim
report will also have access. An entity is required to apply the same accounting policies
in its interim financial report as in its immediately preceding annual financial statements.
This report includes the disclosure requirements for interim financial statements as per IAS 34.
This report includes the compliance analysis of interim financial statements of selected 4
companies with IAS 34. Two of them are from manufacturing sector, 1 from textile sector and
the other from fuel and power sector. The financial statements have been analyzed on the basis
of a check list consisting of significant disclosures requirements. We have found that the
financial statements did not include some useful requirements outlined in IAS 34. The financial
statements could have been more useful to the users in decision making if they include these
disclosures.














1.0 Introduction
Interim financial statements are financial reports covering a period of less than a financial year.
An interim statement is used to convey the performance of a company before the end of the year.
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. Therefore few of the notes to the annual
financial statements are repeated or updated in the interim report. Instead, the interim
notes include primarily an explanation of the events and changes that are significant to an
understanding of the changes in financial position and performance of the entity since the end of
the last annual reporting period. An entity that presents interim financial statements can choose
either to prepare them in the format of a complete set of financial statements or in the format a
set of condensed financial statements. IAS 34 Interim Financial Reporting also does not mandate
which entities are required to publish interim financial statements, how frequently they should
be produced or how soon interim reports should be released after each reporting date. The
standard however encourages, specifically, publicly traded entities to provide interim financial
reports at least as of the end of the first half of their financial year, not later than 60 days after the
interim reporting date.

In this report the interim financial statements of first two quarter of selected 4 companies have
been analyzed and compared to the disclosure requirements set by IAS 34. The companies are
ACI Limited, Agricultural Marketing Co. Ltd, Khulna Power Company Ltd and Apex Spinning
& Knitting Mills Limited.





2.0 Definition of Interim Financial Statements
Interim period is a financial reporting period shorter than a full financial year (most typically a
quarter or half-year). Interim financial report is a financial report that contains either a complete
or condensed set of financial statements for an interim period. Interim financial statements cover
information prepared and presented in accordance with an applicable financial reporting
framework that comprises either a complete or condensed set of financial statements covering a
period or periods less than one full year or covering a 12-month period ending on a date other
than the entity's fiscal year end. The International Accounting Standards Board (IASB) suggests
certain standards to be followed for 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, including
using the same accounting methods.

Important characteristics of interim financial statements are:
cover a financial reporting period shorter than a full financial year
apply the same accounting policies as in its immediately preceding annual financial
statements
IFRS does not require the preparation of interim financial statements.
required by Securities regulators, stock exchanges or other stake holders
notes include primarily an explanation of the events and changes that are
significant to an understanding of the changes in financial position and performance of
the entity since the end of the last annual reporting period





3.0 Minimum content and period of an interim financial report
The minimum components specified for an interim financial report are: [IAS 34.8]
a condensed balance sheet (statement of financial position)
either (a) a condensed statement of comprehensive income or (b) a condensed statement
of comprehensive income and a condensed income statement
a condensed statement of changes in equity
a condensed statement of cash flows
selected explanatory notes

If a complete set of financial statements is published in the interim report, those financial
statements should be in full compliance with IFRSs. If the financial statements are condensed,
they should include, at a minimum, each of the headings and sub-totals included in the most
recent annual financial statements and the explanatory notes required by IAS 34. Additional line-
items or notes should be included if their omission would make the interim financial information
misleading. If the annual financial statements were consolidated (group) statements, the interim
statements should be group statements as well. The periods to be covered by the interim
financial statements are as follows:
balance sheet (statement of financial position) as of the end of the current interim period
and a comparative balance sheet as of the end of the immediately preceding financial
year
statement of comprehensive income (and income statement, if presented) for the current
interim period and cumulatively for the current financial year to date, with comparative
statements for the comparable interim periods (current and year-to-date) of the
immediately preceding financial year
statement of changes in equity cumulatively for the current financial year to date, with a
comparative statement for the comparable year-to-date period of the immediately
preceding financial year
statement of cash flows cumulatively for the current financial year to date, with a
comparative statement for the comparable year-to-date period of the immediately
preceding financial year
If the company's business is highly seasonal, IAS 34 encourages disclosure of financial
information for the latest 12 months, and comparative information for the prior 12-month period,
in addition to the interim period financial statements. [IAS 34.21]

























4.0 Required note disclosures
The explanatory notes required are designed to provide an explanation of events and transactions
that are significant to an understanding of the changes in financial position and performance of
the entity since the last annual reporting date. IAS 34 states a presumption that anyone who reads
an entity's interim report will also have access to its most recent annual report. Consequently,
IAS 34 avoids repeating annual disclosures in interim condensed reports.

4.1 Significant events and transactions
A reporting entity, as a consequence, only provides explanatory notes that are material to
an understanding of the current interim period. Disclosures that are available from the most
recent annual statements are not duplicated in the interim financial statements. The information
in the notes is normally presented on a financial year to date basis (i.e. they cover the period
from the beginning of the financial year until the end of the interim period). IAS 34
provides a list of examples that, if material would require disclosures. These are:
Write-down of inventories to net realisable value and the reversal of such a write-down
Recognition of a loss from the impairment of financial assets, property, plant and
equipment, intangible assets, or other assets, and the reversal of such an impairment loss
Reversal of any provisions for the costs of restructuring
Acquisitions and disposals of items of property, plant and equipment
Commitments for the purchase of property, plant and equipment
Litigation settlements
Corrections of prior period errors
Changes in the business or economic circumstances that affect the fair value of
the entitys financial assets and financial liabilities, whether those assets or
liabilities are recognised at fair value or amortised cost
Loan default or breach of a loan agreement that has not been remedied on or before the
end of the reporting period
Related party transactions
Transfers between levels of the fair value hierarchy used in measuring the fair
value of financial instruments
Changes in the classification of financial assets as a result of a change in the purpose or
use of those assets
Changes in contingent liabilities or contingent assets.
For events or transactions that are considered to be significant to an understanding
of the interim financial statements, an explanation of the transaction is required
together with an update of the relevant information which was included in most recent
annual financial statements
















4.2 Other required disclosures
The information set out in IAS 34, if not disclosed elsewhere in the interim condensed
consolidated financial statements, is required:
A statement that the same accounting policies and methods of computation are
followed in the interim financial statements as compared with the most recent
annual financial statements or, if those policies or methods have been changed, a
description of the nature and effect of the change
Explanatory comments about the seasonality or cyclicality of interim operations
The nature and amount of items affecting assets, liabilities, equity, net income or
cash flows that are unusual because of their nature, size or incidence
The nature and amount of changes in estimates of amounts reported in prior interim
periods of the current financial year or changes in estimates of amounts reported in prior
financial years
Issues, repurchases and repayments of debt and equity securities
Events after the interim period that have not been reflected in the financial
statements for the interim period
The effect of changes in the composition of the entity during the interim period, including
business combinations, obtaining or losing control of subsidiaries and long-term
investments, restructurings, and discontinued operations. In the case of business
combinations, the entity shall disclose the information required by IFRS 3 Business
Combinations. The applicable disclosures for business combinations during the
interim period are defined in IFRS 3. Disclosures regarding business combinations
in prior years that result in adjustments in the current interim period are defined in
IFRS 3.
Dividends paid (aggregate or per share) separately for ordinary shares and other shares




The following segment information (disclosure of segment information is required
in an entitys interim financial report only if IFRS 8 Operating Segments requires
that entity to disclose segment information in its annual financial statements):
Revenues from external customers, if included in the measure of segment profit or
loss reviewed by the chief operating decision maker or otherwise regularly
provided to the chief operating decision maker
Intersegment revenues, if included in the measure of segment profit or loss
reviewed by the chief operating decision maker or otherwise regularly provided
to the chief operating decision maker
A measure of segment profit or loss
Total assets for which there has been a material change from the amount
disclosed in the last annual financial statements
A description of differences from the last annual financial statements in the
basis of segmentation or in the basis of measurement of segment profit or loss
A reconciliation of the total of the reportable segments measures of profit or loss to
the entitys profit or loss before tax expense (tax income) and discontinued
operations. However, if an entity allocates to reportable segments items such as
tax expense (tax income), the entity may reconcile the total of the segments
measures of profit or loss to profit or loss after those items.










4.3 Other Important Issues
Accounting policies
The same accounting policies should be applied for interim reporting as are applied in the entity's
annual financial statements, except for 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.
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. [IAS 34.43]

Measurement
Measurements for interim reporting purposes should be made on a year-to-date basis, so that the
frequency of the entity's reporting does not affect the measurement of its annual results. Several
important measurement points:
Revenues that are received seasonally, cyclically or occasionally within a financial year
should not be anticipated or deferred as of the interim date, if anticipation or deferral
would not be appropriate at the end of the financial year. [IAS 34.37]
Costs that are incurred unevenly during a financial year should 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. [IAS 34.39]
Income tax expense should be recognised based on the best estimate of the weighted
average annual effective income tax rate expected for the full financial year. [IAS 34
Appendix B12]

Materiality
In deciding how to recognise, measure, classify, or disclose an item for interim financial
reporting purposes, materiality is to be assessed in relation to the interim period financial data,
not forecast annual data.


5.0 Compliance Analysis of selected financial statements with IAS 34
The interim financial statements should follow the requirements mentioned in IAS 34 and should
include certain note disclosures. In this report the compliance of the interim financial statements
with IAS 34 has been analyzed in respect of following points:
Significant Requirements or Note Disclosures for Interim Financial Statements
A statement that entitys interim financial report is in compliance with IAS 34
Inclusion of at least each of the headings and subtotals that were included in their
most recent annual financial statements
Comparative information should be presented in the interim financial statements unless
the current period is the entitys first period of operations.
The interim statement of financial position is required to include comparative
information i.e. the information of the current interim period and the comparable
interim periods
Inclusion of income and expenses of the current interim period and the
comparable interim periods in the interim Statement of comprehensive income
Inclusion of cash flows of the current interim period and the comparable
interim periods in the interim Statement of cash flows
The interim Statement of changes in equity is required to include comparative
information i.e. the information of the current interim period and the comparable
interim periods
A statement that the same accounting policies and methods of computation are followed
in the interim financial statements as compared with the most recent annual financial
statements
Basic and diluted earnings per share for that period should be included when the
entity is within the scope of IAS 33 Earnings per Share.
For operating segments, the following information should be included in the interim
financial statement:
revenues from external customers
intersegment revenues
a measure of segment profit or loss.
a description of differences from the last annual financial statements in the basis of
segmentation or in the basis of measurement of segment profit or loss.
a reconciliation of the total of the reportable segments measures of profit or
loss to the entitys profit or loss
Significant events after the interim period that have not been reflected in the
financial statements for the interim period.


In this report, interim financial statements of 4 companies have been analyzed to have an idea of
reporting in the real financial statements and to determine whether they have been prepared in
compliance with IAS 34. Interim financial statements of first two quarters have been taken into
consideration in this report. Interim financial statements of the following companies have been
considered:
a) ACI Limited
b) Agricultural Marketing Co. Ltd.
c) Khulna Power Company Ltd
d) Apex Spinning & Knitting Mills Limited.

Analysis of the interim financial statements of the above mentioned companies has been
discussed in the next sections.











5.1 ACI Limited
The two following interim financial statements of ACI Limited have been considered:
1. Interim Financial Statements of 1
st
Quarter Ended at 31
st
March, 2013
2. Interim Financial Statements of half year/quarter ended 30
th
June, 2013
The unaudited financial statements include the Statement of Financial Position, Statement of
Comprehensive Income, Statement of Cash Flow, Statement of Changes in Equity and selected
explanatory notes. Financial Statements also include consolidated statements. We have found the
following compliance and inconsistencies in the financial statements:
Compliances Inconsistencies
A statement that entitys interim
financial report is in compliance with
the applicable accounting policies
Inclusion of at least each of the
headings and subtotals that were
included in their most recent annual
financial statements
Comparative information presented in
the interim financial statements unless
the current period is the entitys first
period of operations.
Basic earnings per share for the
period
For operating segments:
revenues from external customers
intersegment revenues
a measure of segment profit or loss.


There is no statement that the same
accounting policies and methods of
computation are followed in the interim
financial statements as compared with
the most recent annual financial
statements
There is no disclosure regarding
significant events after the interim
period that have not been reflected
in the financial statements for the
interim period.
No Disclosure about the treatment of
tax
No Disclosure regarding related party
transactions
For operating segments, there is no
reconciliation of the total of the
reportable segments measures of
profit or loss to the entitys profit
or loss
5.2 Agricultural Marketing Co. Limited (Pran)
Interim financial statements of the 1
st
quarter covering a period of July, 2013 to September, 2013
have been analyzed for determining whether they have been prepared in compliance with IAS
34. The unaudited financial statements include the Balance Sheet, Income Statement, Cash Flow
Statement, Statement of Changes in Equity and selected explanatory notes.

We have found the following compliance and inconsistencies in the financial statements:
Compliances Inconsistencies
Inclusion of at least each of the
headings and subtotals that were
included in their most recent annual
financial statements
Comparative information presented in
the interim financial statements unless
the current period is the entitys first
period of operations.
Basic and diluted earnings per share
for the period
Disclosure about the treatment of tax
There is no statement that the same
accounting policies and methods of
computation are followed in the interim
financial statements as compared with
the most recent annual financial
statements
A statement that entitys interim
financial report is in compliance with
the applicable accounting policies
There is no disclosure regarding
significant events after the interim
period that have not been reflected
in the financial statements for the
interim period.
No Disclosure regarding related party
transactions
No disclosure regarding operating
segments




5.3 Khulna Power Company Ltd
The two following interim financial statements of Khulna Power Company Ltd have been
considered:
1. Interim Financial Statements of 1
st
Quarter Ended 31
st
March, 2013
2. Interim Financial Statements of half year/quarter ended 30
th
June, 2013
The unaudited financial statements include the Statement of Financial Position, Statement of
Comprehensive Income, Statement of Cash Flow, Statement of Changes in Equity and selected
explanatory notes. Financial Statements also include consolidated statements.
We have found the following compliance and inconsistencies in the financial statements:
Compliances Inconsistencies
A statement that entitys interim
financial report is in compliance with
the applicable accounting policies
A statement that the same accounting
policies and methods of computation
are followed in the interim financial
statements as compared with the most
recent annual financial statements
Inclusion of at least each of the
headings and subtotals that were
included in their most recent annual
financial statements
Comparative information in the interim
financial statements
Basic earnings per share for that
period
There is no disclosure regarding
significant events after the interim
period that have not been reflected
in the financial statements for the
interim period.
No Disclosure regarding related party
transactions






5.4 Apex Spinning & Knitting Mills Limited
The two following interim financial statements of Khulna Power Company Ltd have been
considered:
1. Interim Financial Statements of 1
st
Quarter 30
th
June, 2013
2. Interim Financial Statements of half year/quarter ended 30
th
September, 2013
The unaudited financial statements include the Statement of Financial Position, Statement of
Comprehensive Income, Statement of Cash Flow, Statement of Changes in Equity and selected
explanatory notes. Financial Statements also include consolidated statements. We have found the
following compliance and inconsistencies in the financial statements:
Compliances Inconsistency
Inclusion of at least each of the
headings and subtotals that were
included in their most recent
annual financial statements
Comparative information
presented in the interim financial
statements unless the current
period is the entitys first period of
operations.
Basic earnings per share for the
period

No statement that entitys interim financial
report is in compliance with the applicable
accounting policies
There is no statement that the same
accounting policies and methods of
computation are followed in the interim
financial statements as compared with the
most recent annual financial statements
There is no disclosure regarding significant
events after the interim period that have
not been reflected in the financial
statements for the interim period.
No Disclosure about the treatment of tax
No Disclosure regarding related party
transactions
No Disclosure regarding operating segment


6.0 Findings
Interim financial report is a financial report that contains either a complete or condensed set of
financial statements for an interim period. IFRS does not require the preparation of interim
financial statements. The standard however encourages, specifically, publicly traded entities to
provide interim financial reports at least as of the end of the first half of their financial year, not
later than 60 days after the interim reporting date. The interim financial statements should follow
the requirements mentioned in IAS 34 and should include certain note disclosures. In this report,
interim financial statements of 4 companies have been analyzed to identify their compliance with
IAS 34. After analyzing these interim financial statements, we have found that there are some
inconsistencies in the statements. Overall findings have been shown in the given table:
Requirements ACI
Limited

AMCL
(Pran)
Khulna
Power
Company
Ltd
Apex
Spinning
& Knitting
Mills Ltd.
A statement that entitys interim financial report
is in compliance with IAS 34

Inclusion of at least each of the headings and
subtotals that were included in their most
recent annual financial statements

Comparative information in the financial
statements

A statement that the same accounting policies
and methods of computation are followed as
compared with the most recent annual financial
statements

Basic earnings per share
Disclosures regarding operating segments
Disclosures regarding Significant events after
the interim period

Disclosures regarding treatment of tax
Disclosure regarding related party transactions

All of the financial statements didnt follow the following:
A statement that the same accounting policies and methods of computation are followed
as compared with the most recent annual financial statements
Disclosures regarding Significant events after the interim period
Disclosure regarding related party transactions
All of the financial statements have followed the following:
Inclusion of at least each of the headings and subtotals that were included in their
most recent annual financial statements
Comparative information in the financial statements
Basic earnings per share
Though the financial statements didnt include some important disclosures, they have followed
significant requirements set by IAS 34. The financial statements could have been more useful to
the users if they include them. But they are not so significant that their omission could lead to
influence the judgment of the users.












7.0 Conclusion
An interim statement is used to convey the performance of a company before the end of the year.
This report can increase communication between companies and the public, and provide
investors with up-to-date information between annual reporting periods. An entity is required
to apply the same accounting policies in its interim financial report as in its immediately
preceding annual financial statements. This report includes few of the notes to the annual
financial statements are repeated or updated in the interim report. Instead, the interim
notes include primarily an explanation of the events and changes that are significant to an
understanding of the changes in financial position and performance of the entity since the end of
the last annual reporting period. This report includes the compliance analysis of interim financial
statements of selected 4 companies with IAS 34. The financial statements include most of the
disclosures which can influence the decisions of users in making economic decisions.















References
ACI Ltd, 1
st
Quarter Ended Report
ACI Ltd, Half Yearly Report
Agricultural Marketing Co. Limited, 1
st
Quarter Report
Apex Spinning & Knitting Mills Limited, 1
st
Quarter Ended Report
Apex Spinning & Knitting Mills Limited, Half Yearly Report
Khulna Power Company Ltd, 1
st
Quarter Report
Khulna Power Company Ltd, Half Yearly Report