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  Interim Financial Statements

Introduction to Interim Financial Statements

Interim financial statements were primary published in the US (united state) at the turn of the last century and began to come out in the UK (United Kingdom) in the 1950s. The major thrust for their publication came from progressive managers who felt that the interval among annual financial statements is very long for users to be without information. These days, interim financial statements are an essential part of the financial reporting cycle of most large businesses.

Regulatory authorities, specifically Stock Exchanges, have been the main reason for this. Generating half-yearly or quarterly interim financial statements is generally a significant listing need.

The exact role of interim financial statements has verified to be a source of contention. A number of believe that they are just a supplement to the annual financial statements; their aim being to give timely information which can assist in predicting annual profits or losses. Though, others believe that they should not focus just on assisting to predict the future. They should also assist to prove the results of earlier predictions. Such as annual financial statements, they should have both a confirmatory and a predictive role and there is no cause why they should not. Nevertheless, a year is an arbitrary reporting period and annual financial statements seldom cover the operational cycle of a business.

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