Interim financial information is essential to provide investors and others with timely information as to the progress of the entity. The usefulness of such information rests on the relationship that it has to the annual results of operations. Accordingly, each interim period should be viewed primarily as an integral part of an annual period.
(P) December 16, 2027; (N) December 16, 2028
270-10-65-1The usefulness of interim financial statements and notes in accordance with generally accepted accounting principles (GAAP) rests on the relationship that they have to the annual results of operations. Each interim period should be viewed primarily as an integral part of an annual period. Those costs and expenses that are associated directly with or allocated to the products sold or to the services rendered for annual reporting purposes (including, for example, material costs, wages and salaries and related fringe benefits, manufacturing overhead, and warranties) shall be similarly treated for interim reporting purposes.
The objective in all cases is to achieve a fair measure of results of operations for the annual period and to present fairly the financial position at the end of the annual period. The following standards shall apply in accounting for costs and expenses other than product costs in interim periods: - a
Costs and expenses other than product costs shall be charged to income in interim periods as incurred, or be allocated among interim periods based on an estimate of time expired, benefit received or activity associated with the periods. Procedures adopted for assigning specific cost and expense items to an interim period shall be consistent with the bases followed by the entity in reporting results of operations at annual reporting dates. However, if a specific cost or expense item charged to expense for annual reporting purposes benefits more than one interim period, the cost or expense item may be allocated to those interim periods (see paragraph 270-10-45-9). - b
Some costs and expenses incurred in an interim period, however, cannot be readily identified with the activities or benefits of other interim periods and shall be charged to the interim period in which incurred. Disclosure in the notes to financial statements shall be made as to the nature and amount of such costs unless items of a comparable nature are included in both the current interim period and in the corresponding interim period of the preceding year. (See paragraph 270-10-50-1B.) - c
Arbitrary assignment of the amount of such costs to an interim period shall not be made.
- d
Gains and losses that arise in any interim period similar to those that would not be deferred at year end shall not be deferred to later interim periods within the same fiscal year.
(P) December 16, 2027; (N) December 16, 2028
270-10-65-1The objective in all cases is to achieve a fair measure of results of operations for the annual period and to present fairly the financial position at the end of the annual period. The following standards shall apply in accounting for costs and expenses other than product costs in interim periods: - a
Costs and expenses other than product costs shall be charged to income in interim periods as incurred, or be allocated among interim periods based on an estimate of time expired, benefit received or activity associated with the periods. Procedures adopted for assigning specific cost and expense items to an interim period shall be consistent with the bases followed by the entity in reporting results of operations at annual reporting dates. However, if a specific cost or expense item charged to expense for annual reporting purposes benefits more than one interim period, the cost or expense item may be allocated to those interim periods (see paragraph 270-10-45-9). - b
- c
Arbitrary assignment of the amount of such costs to an interim period shall not be made.
- d
Gains and losses that arise in any interim period similar to those that would not be deferred at year end shall not be deferred to later interim periods within the same fiscal year.
The amounts of certain costs and expenses are frequently subjected to year-end adjustments even though they can be reasonably approximated at interim dates. To the extent possible such adjustments should be estimated and the estimated costs and expenses assigned to interim periods so that the interim periods bear a reasonable portion of the anticipated annual amount. Examples of such items include inventory shrinkage, allowance for uncollectible accounts, allowance for quantity discounts, and discretionary year-end bonuses.
Revenues of certain entities are subject to material seasonal variations. To avoid the possibility that interim results with material seasonal variations may be taken as fairly indicative of the estimated results for a full fiscal year, such entities shall disclose the seasonal nature of their activities, and consider supplementing their interim reports with information for 12-month periods ended at the interim date for the current and preceding years.
Effects of disposals of a component of an entity and unusual or infrequently occurring transactions and events that are material with respect to the operating results of the interim period shall be reported separately. Gains or losses from disposal of a component of an entity and unusual or infrequently occurring items shall not be prorated over the balance of the fiscal year.
Each report of interim financial information shall indicate any change in accounting principles or practices from those applied in any of the following: - a
The comparable interim period of the prior annual period
- b
The preceding interim periods in the current annual period
- c
The prior annual report.
(P) June 30, 2027; (N) June 30, 2027
105-10-65-7| Editor's Note: The pending content for paragraph 270-10-45-12 linked to paragraph 105-10-65-7 will be removed upon transition of paragraph 270-10-65-1. |
Each report of interim financial information shall indicate any change in accounting principles, change in practices, or change in the reporting entity from those applied in any of the following: - a
The comparable interim period of the prior annual period
- b
The preceding interim periods in the current annual period
- c
The prior annual report.
(P) December 16, 2027; (N) December 16, 2028
270-10-65-1Interim financial statements and notes in accordance with GAAP shall indicate any change in accounting principles, change in practices, or change in the reporting entityfrom those applied in any of the following: - a
The comparable interim period of the prior annual period
- b
The preceding interim periods in the current annual period
- c
The prior annual financial statements.
The effect of a change in accounting estimate, including a change in the estimated effective annual tax rate, shall be accounted for in the period in which the change in estimate is made. No restatement of previously reported interim information shall be made for changes in estimates, but the effect on earnings of a change in estimate made in a current interim period shall be reported in the current and subsequent interim periods, if material in relation to any period presented and shall continue to be reported in the interim financial information of the subsequent year for as many periods as necessary to avoid misleading comparisons. Such disclosure shall conform with paragraph 250-10-50-4. (P) December 16, 2027; (N) December 16, 2028
270-10-65-1The effect of a change in accounting estimate, including a change in the estimated effective annual tax rate, shall be accounted for in the period in which the change in estimate is made. No restatement of previously issued interim financial statements and notes in accordance with GAAP shall be made for changes in estimates, but the effect on earnings of a change in estimate made in a current interim period shall be reported in the current and subsequent interim periods, if material in relation to any period presented and shall continue to be reported in the interim financial statements and notes in accordance with GAAP of the subsequent year for as many periods as necessary to avoid misleading comparisons. Such disclosure shall conform with paragraph 250-10-50-4. The following may not represent all references to interim reporting:
- a
For accounting changes, see paragraphs
.
- b
- c
For incurred but not reported liability and interim reporting, see paragraphs
and
720-20-35-8.
- d
For income tax provisions, see Subtopic
740-270.
- e
- f
For pensions and other postretirement benefits, see paragraphs
and
715-60-35-40.
(P) June 30, 2027; (N) June 30, 2027
105-10-65-7| Editor's Note: The pending content for paragraph 270-10-45-19 linked to paragraph 105-10-65-7 will be removed upon transition of paragraph 270-10-65-1. |
The following may not represent all references to interim reporting:
- a
- b
- c
For incurred but not reported liability and interim reporting, see paragraphs
and
720-20-35-8.
- d
For income tax provisions, see Subtopic
740-270.
- e
- f
For pensions and other postretirement benefits, see paragraphs
and
715-60-35-40.
(P) December 16, 2027; (N) December 16, 2028
270-10-65-1The following may not represent all references to interim reporting:
- a
- b
- c
For incurred but not reported liability and interim reporting, see paragraphs
and
720-20-35-8.
- d
For income tax provisions, see Subtopic
740-270.
- e
- f
For pensions and other postretirement benefits, see paragraphs
and
715-60-35-40.
- g
For evaluation of a going concern, see paragraphs .
(P) December 16, 2027; (N) December 16, 2028
270-10-65-1When preparing interim financial statements and notes in accordance with GAAP (including condensed statements), a Securities and Exchange Commission registrant (SEC registrant) shall refer to the applicable form and content of interim financial statements for SEC registrants. For example, see Regulation S-X Rule 10-01 (17 CFR 210.10-01) and Regulation S-X Rule 8-03 (17 CFR 210.8-03) (paragraph 270-10-S45-2).(P) December 16, 2027; (N) December 16, 2028
270-10-65-1An entity that is not an SEC registrant may issue interim financial statements and notes in accordance with GAAP. When those financial statements are issued, the entity may present either of the following:- a
Financial statements presented using the same level of aggregation as the annual financial statements and notes subject to applicable annual disclosure requirements in GAAP
- b
Financial statements that are presented at a level more aggregated than the annual financial statements or that have limited notes subject to the disclosure requirements in this Topic or both (condensed statements).
(P) December 16, 2027; (N) December 16, 2028
270-10-65-1If an entity that is not an SEC registrant chooses to present condensed statements in accordance with paragraph 270-10-45-21(b), the entity shall follow the following form and content guidance:- a
For the statement of financial position at the end of the reporting period, an entity shall include separate captions for each balance sheet component presented in the annual financial statements that is 10 percent or more of total assets. An entity also shall separately present cash and retained earnings regardless of the relative significance to total assets. An entity that presents a classified statement of financial position at the end of the annual reporting period shall present totals for current assets and current liabilities.
- b
For the statement of earnings for the reporting period, an entity shall include net sales or gross revenue and present each cost and expense category presented in the annual financial statements that exceeds 20 percent of sales or gross revenues (financial institutions shall substitute net interest income for sales). An entity also shall present the provision for income taxes and discontinued operations.
- c
For the statement of cash flows for the reporting period, an entity shall present totals for each category of cash flow activities (operating, investing, and financing) as well as cash at the beginning and end of each period and the increase or decrease in such balance.
- d
For investments by and distributions to owners for the reporting period, an entity shall present (in a note or a separate statement) an analysis of the changes in each caption presented in the statement of financial position. The analysis of changes shall be presented in the form of a reconciliation of the beginning balance to the ending balance for the reporting period. An entity also shall separately present investments by and distributions to owners.
However, if an entity that is not an SEC registrant is required by the SEC to follow certain form and content requirements under SEC rules and regulations, the entity shall follow the requirements specified by the SEC.(P) December 16, 2027; (N) December 16, 2028
270-10-65-1An entity that is not an SEC registrant that chooses to apply the guidance in Regulation S-X Rule 10-01(a) (17 CFR 210.10-01(a)) or Regulation S-X Rule 8-03(a) (17 CFR 210.8-03(a)) is considered to be in compliance with the content requirements for condensed statements in paragraph 270-10-45-22.(P) December 16, 2027; (N) December 16, 2028
270-10-65-1Condensed statements can be provided only if the previous annual financial statements have been issued (or the financial statements have been made available for issuance).(P) December 16, 2027; (N) December 16, 2028
270-10-65-1If a not-for-profit entity presents condensed statements, the following requirements shall apply:- a
Net assets with donor restrictions and net assets without donor restrictions shall be presented regardless of relative significance to total net assets in the statement of financial position.
- b
The required disclosure of expenses by nature and function may be condensed in accordance with the guidance in paragraphs , whether presented on the face of the statement of activities, as a separate schedule in the notes to financial statements, or in a separate financial statement. - c
The requirement to provide a separate statement of changes in investments by and distributions to owners or disclosures explaining that such changes are not applicable.