Interim period

Definition

An interim period is a financial reporting timeframe shorter than a full fiscal year, such as a quarter or a month. It aids in providing timely financial information to stakeholders.

5 Must Know Facts For Your Next Test

1. Interim periods require adjusting entries to ensure accurate financial statements.
2. Typical adjustments during an interim period include accrued expenses, prepaid expenses, and revenue recognition.
3. Financial statements for interim periods must adhere to the same accounting principles as annual statements.
4. Interim reports help in assessing the ongoing financial health of an organization.
5. The SEC requires publicly traded companies to report quarterly results, which are examples of interim periods.

Review Questions

Related terms

Adjusting Entries:

Adjustments made at the end of an accounting period to update account balances before preparing financial statements.

Accrued Expenses:

Expenses that have been incurred but not yet paid by the end of the accounting period.

Revenue Recognition:

The principle that dictates when revenue should be recorded and reported in the financial statements.