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Reporting period

A reporting period is the span of time covered by a set of financial statements, normally a year from 1 January Year to 31 December Year. The reporting period also called accounting period can also be for a interim period either for a month or quarter. Reporting entities consistently use the same reporting periods from year to year, so that their financial statements can be compared to the ones produced for prior years.

The reporting period is stated in the header of a financial report. For example, the income statement header might read, "for the year ended 31 December Year." while the balance sheet header might read "as of 31 December Year."

Some reporting entities use a reporting period other than the calendar year (if and when allowed under the law prevailing in the domiciling address of the reporting entity), this might be the “12 months period ended 31 March Year.”

On rare occasions, a reporting period may be for a shortened time period, such as a week or a few days. Such a period is used when a business is either starting up operations mid-month or terminating operations prior to the end of a normal reporting period. A shortened period may also be used when a new corporate parent is taking over at mid-month.

Comparatives to enable comparison

To help users of financial statements to identify and assess changes and trends, financial statements also provide comparative information for at least one preceding reporting period.

Forward-looking information

Information about possible future transactions and other possible future events (forward-looking information) is included in financial statements if it:

  1. relates to the entity's assets or liabilities—including unrecognised assets or liabilities—or equity that existed at the end of the reporting period, or during the reporting period, or to income or expenses for the reporting period; and

  2. is useful to users of financial statements.

For example, if an asset or liability is measured by estimating future cash flows, information about those estimated future cash flows may help users of financial statements to understand the reported measures. Financial statements do not typically provide other types of forward-looking information, for example, explanatory material about management's expectations and strategies for the reporting entity.

Financial statements include information about transactions and other events that have occurred after the end of the reporting period if providing that information is necessary to meet the objective of financial statements.

Perspective used in financial statements

Financial statements provide information about transactions and other events viewed from the perspective of the reporting entity as a whole, not from the perspective of any particular group of the entity's existing or potential investors, lenders or other creditors.

Obviously this does not mean that IFRS standards on for example Operating Segments (IFRS 8) should not be used. It implies that segmented financial information has to be reconciled to financial reporting lines already provided in the financial statements.

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