What Are Some Guidelines In Preparing Interim Reports?
• Interim results should be based on the accounting principles used in the last year’s annual report unless a change has been made in the current year. • A gain or loss cannot be deferred to a later interim period unless such deferral has been permissible for annual reporting. • Revenue from merchandise sold and services performed should be accounted for as earned in the interim period in the same way as accounted for in annual reporting. If an advance is received in the first quarter and benefits the entire year, it should be allocated ratably to the interim periods affected. • Costs and expenses should be matched to related revenue in the interim period. If a cost cannot be associated with revenue in a future interim period, it should be expensed in the current period. Yearly expenses such as administrative salaries, insurance, pension plan expense, and year-end bonuses should be allocated to the quarters. The allocation basis may be based on such factors as time expired, benefit obt
