AIM companies can look to a number of different pronouncements when deciding on the content of their first IFRS interim report.
Aim Rule 18 sets out what Aim companies must include in their interim reports. In addition, the newly updated Accounting Standards Board's (ASB) statement on 'Half Yearly Financial Reports' and IAS 34 'Interim Financial Reporting' both provide best practice guidance as to additional disclosures. Aim companies also have a further choice as to whether or not they want to gain the additional comfort of an auditor's review. The requirements for such a review are set out in International Standard on Reporting Engagements 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity (ISRE 2410).
What should be included in an interim statement?
With a range of non-mandatory standards available, there is a great deal of choice for Aim companies when deciding what to include and what not to include in their interim statements. Should they include segmental information, earnings per share and a statement of changes in equity? Should they have their interim information reviewed by their auditors? Should they include comparatives for the full year as well as the corresponding comparative interim period, as required by the Aim Rules?
Our review of Aim interim reports
In an attempt to answer these and other questions, Smith & Williamson has reviewed the first 100 interim reports published in October 2007 to see what Aim companies are doing in practice. Our findings are as follows.
- 98% of the statements we reviewed included disclosure of earnings per share, while only 50% included some form of segmental information.
- 91% of companies included a statement of recognised income and expenses or a statement of changes in equity. The latter option was by far the more popular, with 81% of companies that included either statement opting for the more detailed statement of changes in equity. It should be noted however that in full financial statements, those companies choosing the statement of changes in equity will have to present the details of the statement in changes in equity in the notes.
- Of those companies that disclosed comparatives, i.e. those that were not producing information for their first period, 84% went beyond the requirements of the Aim Rules by disclosing full-year comparatives, as well as those for the previous interim period.
- Only 23% of companies had their interim financial information formally reviewed by their auditors.
- 74% of companies adopting IFRS for the first time included the transitional information in their interim reports. The remaining 26% produced a separate, dedicated IFRS transition document or report.
- Although IAS 34 is not mandatory for Aim companies, 17% of companies disclosed full compliance with the standard, 1% were compliant except for specific items, 24% made an explicit statement that they did not comply with the standard and 58% made no reference at all.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
