Year-to-date measurement

Learning objectives

• Explain that the frequency of reporting (annual, half-yearly or quarterly) must not affect the measurement of annual results, hence measurement on a year-to-date basis.L2, L3
• Calculate the amount for an interim period as the year-to-date amount at that date less the year-to-date amount at the previous date, and check that the sum of the periods equals the year-to-date amount.L2, L3

Normative references

• IAS 34 §28Interim financial statements apply the same accounting policies as the annual financial statements, except for changes made after the date of the most recent annual financial statements that are to be reflected in the next annual financial statements. The frequency of reporting (annual, half-yearly or quarterly) must not affect the measurement of annual results: interim measurements are therefore made on a year-to-date basis.
• IAS 34 §29Para. 29 explains that requiring the same accounting policies does not make each interim period a stand-alone period: by stating that the frequency of reporting does not affect annual results, para. 28 treats the interim period as part of the financial year; year-to-date measurement may change estimates reported in earlier interim periods, but the recognition principles remain those of the annual financial statements.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

4 questions

• Why are the measurements in an interim report made on a year-to-date basis from the beginning of the year?L2
• Corvane SA (financial year = calendar year) published a year-to-date profit of {opening_year_to_date} at 30 June. According to its accounts, the profit of the third quarter is {period_additions} (case data). The draft report at 30 September shows a year-to-date profit of {reported_year_to_date}. Calculate the year-to-date profit at 30 September by adding the quarter to the figure at 30 June, then the control difference with the draft (draft year-to-date figure less recalculated figure).L3
• Ostelle SA publishes quarterly results. In the third quarter, the accountant measured accrued income and expenses as if the quarter were an isolated three-month year, without starting from the nine-month year-to-date figure measured as at an annual closing or deducting the amount already recognised. The nine-month figure obtained differs from the one an annual closing at that date would have given. What is the error?L3
• In the third quarter, year-to-date measurement leads Polaris SA to revise an estimate used in its interim financial statements for the first half-year (case facts). An analyst concludes that each interim period is a stand-alone period whose published estimates can no longer change. What should be retained under IAS 34?L2