Interim financial statements cover periods of less than one year. The most common form of interim financial statements cover one month, one quarter, or six months. Most companies generate a set of general purpose financial statements at the end of each accounting period. These annual reports work well for showing the company’s progress from year to year, but they don’t really show how well the company is doing throughout the year.
That’s where interim statements come in useful. Investors and creditors need current information to help make decisions about the company. It would be crazy for an investor to base his estimated value a company on a 9-month-old balance sheet. The company could have sold off all of its assets in that time frame.
Interim financials are prepared at specific time periods to show investors and creditors the company performance at specific intervals during the accounting period.
The process of preparing interim financial statements is similar to annual financials with a few exceptions. The entire accounting cycle is followed from recording transactions to closing accounts, but some due diligence year-end procedures are sometimes skipped.
If you would like to benefit from Interim Accounts, please have a chat with us to discuss your specific requirements.