Entity A wants to publish quarterly interim financial reports. Which of the following standards may Entity A apply in preparing and presenting its interim financial reports? I. PAS 1 II. PAS 34 III. PFRS 1

Answer:

II. PAS 34

Step-by-step explanation

The first choice is incorrect because PAS 1 entitled Presentation of Financial Statements provides the overall requirements for financial statements, including the structure of reports, the minimum requirements for content and overriding concepts such as going concern, accrual basis and the current or non-current classification. This standard requires a complete set of financial statements to comprise a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity and a statement of cash flows.

The second choice is correct because PAS 34 is also known as Interim Financial Reporting. It sets out the procedures for the preparation and presentation of financial statements for a period of LESS THAN ONE YEAR. The problem stated that Entity A wants to publish quarterly interim financial reports. Remember that a quarter is less than a year. Accordingly, PAS 34 prescribes the minimum content of financial report and the principles for recognition and measurement in complete or condensed financial statements for an interim period. Interim financial reports may be presented monthly, quarterly or semiannually but quarterly interim reports are the most common.

The third choice is also incorrect because PFRS 1 known as First-Time Adoption of PFRS discusses the procedures that an entity must follow when it adopts PFRSs for the first time as the basis for preparing its general purpose financial statements. Moreover, PFRS 1 grants limited exemptions from the general requirement to comply with each PFRS effective at the end of its first PFRS reporting period.