Interim Reporting IAS 34
Discussion Questions
Question 1
Bengal Berhad, with 31 December as accounting year-end, is preparing semi-annual interim financial
statements.
As at 30 June 2022, Bengal Berhad estimated that the net realisable value ($360,000) of a batch of
inventory is lower than its cost ($420,000).
Later, as at 31 December 2022, that batch of inventory is still on hand, and on that date the net realisable
value ($440,000) of the inventory is higher than its cost ($420,000).
Required:
How should that batch of inventory be reported in its interim financial report as at 30 June 2022 and in
its annual financial report as at 31 December 2022?
Question 2
Sibu Berhad, with 31 December as accounting year-end, is preparing semi-annual interim financial
statements.
For the 6 month ended 30 June 2022, Sibu Berhad incurred $800,000 of development costs in a
development project. However, as at 30 June 2022, it was not able to fulfil the recognition criteria of
the development costs under IAS 38. Later, as at 31 December 2022, Sibu Berhad successfully
demonstrated its ability to use the intangible asset and hence fulfil the recognition criteria under IAS
38.
Required:
How should the development cost be reported in its interim financial statements as at 30 June 2022 and
in its annual financial report as at 31 December 2022?
Question 3
Sandakan Berhad is required to pay 2.5% of annual salaries into an insurance fund. Contributions are
capped at 2% of $650,000, which means that no contributions for salaries in excess of $650,000 are
required. Ace has an employee with a monthly salary of $100,000 (annual salary of $1,200,000).
Required:
How much does Sandakan Berhad recognise an expense for the insurance in its half yearly interim
financial statement?