FRS 104, known as Interim Financial Reporting, aligns seamlessly with the Financial Reporting Council’s (FRC) overarching objective of delivering high-quality, comprehensible financial reporting tailored to both the scale and intricacy of entities, as well as the informational needs of users. Rooted in IAS 34 Interim Financial Reporting, FRS 104 operates within the framework of financial standards and is not a standalone accounting standard.

Specifically crafted for entities applying FRS 102 in their annual financial statements, FRS 104 extends its applicability to those utilizing FRS 101 for their annual reporting. It’s crucial to emphasize that FRS 104 does not enforce a compulsory obligation on entities to produce interim financial reports. However, in cases where a statement of compliance is declared, strict adherence to all provisions outlined in FRS 104 is mandatory. This dual approach, aligning with established financial standards and providing flexibility for different reporting practices, reinforces FRS 104’s role in promoting transparency and accountability in interim financial reporting, ultimately contributing to the overall reliability of financial information for stakeholders.

Significant Events and Transactions

In the realm of interim financial reporting, FRS 104 delineates the obligation for entities to incorporate in their interim financial reports an elucidation of events and transactions wielding a significant influence on alterations in their financial position and performance since the preceding annual reporting period. This mandate extends to updating pertinent information featured in the most recent annual financial report. Although users of interim reports possess the latest annual financial report, the interim report is spared from furnishing relatively inconsequential updates. FRS 104 furnishes a comprehensive list of events and transactions necessitating disclosure, encompassing inventory write-downs, impairment losses, restructuring provisions, acquisitions, disposals, litigation settlements, corrections of errors, changes in fair value due to business or economic circumstances, loan defaults, related party transactions, and alterations in contingent liabilities or assets. Detailed guidance for disclosure requisites pertaining to these elements can be referenced in specific sections of FRS 102. The focal point remains on imparting a lucid comprehension of noteworthy alterations in the entity’s financial position and performance since the preceding annual reporting period.

Disclosures Requirement

FRS 104 underscores transparent financial reporting by requiring entities to disclose consistent accounting policies or provide a detailed account of any changes. It mandates the disclosure of the nature and impact of unusual items affecting assets, liabilities, equity, profit or loss, and cash flows, including changes in estimates from prior periods. Mandatory disclosures cover debt and equity securities, dividends, segment information, events post-interim period, changes in entity composition, and financial instruments. For entities transitioning between reporting frameworks, specific reconciliations and descriptions are crucial. Explicit disclosure of compliance with FRS 104 reinforces the commitment to transparency. This comprehensive disclosure approach aims to offer stakeholders a clear insight into an entity’s financial status, performance, and relevant changes during the interim period.