Interim financial statements are business documents prepared for a period of less than one year. Companies often prepare income statements, balance sheets, cash flow statements and owners' equity statements monthly and quarterly, as well as annually. Interim statements offer a shorter-term, more timely perspective on company finances.
Public Company Requirements
The Securities and Exchange Commission requires public companies to share quarterly and annual earnings reports with the public. Private companies don't have to disclose finances. The auditing standards and principle requirements are less rigid for interim statements than for annual statements. However, the company must disclose when an interim statement presented to the public is unaudited. It must also note any items that materially impact the reader's interpretation of business activities.
Interim statements also have value in managerial accounting, which is internal use of reports for decision-making. Managers often want monthly reports to monitor changes in important financial metrics, such as profit margins, cash, assets and liabilities. Internal statements don't have formal standards to meet as they are for internal use only.
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