What Does an Interim Statement Mean?

A financial report for less than a year is called an interim statement. Before the normal full-year financial reporting cycle ends, interim statements show how well a company is doing. Interim statements don’t need to be audited like yearly statements do. Companies and the public can talk to each other better through interim statements, which give investors up-to-date information between yearly reporting periods.

These reports may also be called interim reports.

How to Read Interim Statements

An example of an interim statement is a report that comes out every three months before the end of the year.

The International Accounting Standards Board (IASB) says that when interim accounts are made, they should include specific standards. These are a set of shortened financial records that show the company’s income, cash flows, and changes in equity, along with notes that explain each one.

The IASB also says that companies should use the same accounting methods and follow the same rules when making their annual reports, which are audited, and when making their interim statements.

Instead of waiting for year-end statements, which aren’t publicly available until months after the end of the year, interim statements give you a better idea of how a business is doing right now. Investors find the regular views useful when deciding where to invest their capital. This makes the market more liquid, which is one of the main goals of capital markets.

Investors and analysts can also learn about recent changes that significantly impact the company from these papers. A form 8-K, for example, lets owners or the Securities and Exchange Commission (SEC) know about unplanned vital events or changes at a company that might be important to them. The report tells the public about events like a company being bought, going bankrupt, shareholders resigning, or the fiscal year changing. According to the company, Form 8-K reports can be sent out for any other event the registrant thinks is essential for owners.

Example: Reports every three months

Most of the time, the quarterly report is the most frequent interim statement. Companies put out a quarterly report every three months. It is a summary or group of unaudited financial statements like balance sheets, income statements, and cash flow statements. These statements may give year-to-date and comparison (for example, last year’s quarter to this year’s quarter) results and quarterly numbers. Companies trading on the stock market must send their records to the Securities and Exchange Commission. It’s called a 10–Q, and it doesn’t have all the specific information that a 10–K, which is the annual report, would have, like background and operations information.

The SEC also requires investment firms with over $100 million in assets to file a Form 13F every three months.

Four quarters in a business year end on March 31, June 30, September 30, and December 31. The year ends on December 31. Usually, quarterly reports are turned in a few weeks after the end of the quarter.

Conclusion

• A company makes interim statements and financial records covering less than a year.
• The goal is to keep shareholders and analysts more informed and in touch with corporate management daily. The public should also be made aware of significant changes to the company as soon as possible.
• Companies often give reports every three months, and the SEC may sometimes require them to do so.