AS 25 of ICAI sets rules for preparing interim financial statements for periods shorter than a full financial year. It applies to non-Ind AS entities. Listed and large companies that follow Ind AS must use Ind AS 34 instead. SEBI requires listed entities to publish quarterly results under LODR.
What Is AS 25 of ICAI?
AS 25 of ICAI provides recognition, measurement, and disclosure guidance for interim financial reporting. It defines the minimum content and principles for the period under review.
Entities governed by Indian GAAP (non-Ind AS) apply AS 25. Ind AS entities use Ind AS 34: Interim Financial Reporting.
Applicability Clarification: AS 25 vs Ind AS 34
AS 25 applies to companies that follow Accounting Standards under the Companies (Accounting Standards) Rules, 2021.
Ind AS 34 applies to listed companies and other entities required to follow Ind AS.
SEBI LODR requires listed entities to file quarterly financial results. These results comply with AS 25 or Ind AS 34, depending on the applicable framework.
Why AS 25 of ICAI Matters
Entities publish interim results to share timely performance updates. AS 25 ensures each period reflects consistent accounting policies, clear disclosures, and comparable data. These reports help investors, lenders, and regulators take informed decisions.
Key Components of Interim Financial Statements
Complete or Condensed Statements
An interim report may present full statements or condensed versions. Condensed statements include:
Condensed balance sheet
Condensed statement of profit and loss
Condensed cash flow statement
Selected explanatory notes
Comparative Figures (Mandatory)
AS 25 requires:
Comparative statement of profit and loss for the same interim period of the previous financial year.
Comparative balance sheet as at the end of the previous financial year.
Comparative cash flow statement for the same interim period of the previous year.
Recognition and Measurement Under AS 25
Consistent Accounting Policies
Entities must use the same policies applied in annual statements. Any change should be disclosed with its effect.
Materiality
Materiality differs for interim periods. A small item may be material in an interim report even if not material annually.
Use of Estimates
Interim reporting depends more on estimates because less data is available. Entities must disclose major estimates where they affect understanding.
Income Tax Calculation (Improved Explanation)
Interim tax expense equals:
Estimated annual average tax rate × year-to-date income, adjusted for discrete items such as one-time tax events.
This estimated rate includes MAT under Section 115JB where relevant.
Disclosure Requirements
Key Notes Required
Interim notes should disclose:
Accounting policies
Seasonal or cyclical factors
Unusual items
Changes in estimates
EPS (basic and diluted) if presented annually
Issue/buyback of securities
Dividends
Segment information:
AS 17 for AS 25 entities
Ind AS 108 for Ind AS entities
Events after the interim period
Contingent liabilities and commitments
Changes in fair value for financial instruments (if applicable)
EPS Disclosure Requirement
If an entity presents EPS in its annual statements, AS 25 requires both basic and diluted EPS in interim results.
Example Scenario (India-Focused)
A mid-sized manufacturing company prepares half-yearly results under Indian GAAP. It uses AS 25 because it does not follow Ind AS. Raw material prices rise due to global events. The company must disclose the impact, update estimates, and present comparable figures for the same half-year of the previous financial year.
If it presents EPS annually, the half-yearly EPS must appear in the interim report.
SEBI Rules and Timelines (For Listed Entities)
SEBI (LODR) requires quarterly results to be published:
Within 45 days of quarter-end (Q1, Q2, Q3).
For Q4, results follow the timeline for annual financial statements.
These timelines apply regardless of whether the entity follows AS 25 or Ind AS 34.
Practical Tips for Accountants
Check whether the entity applies AS 25 or Ind AS 34.
Keep clear workpapers for estimates.
Track seasonal or cyclical trends such as monsoon-driven costs.
Ensure all comparative figures appear correctly.
Follow SEBI’s reporting templates if listed.
Review tax calculations for estimated annual rate and discrete adjustments.
Refer to authorised tax professionals for case-specific situations.
Conclusion
AS 25 of ICAI supports clear and comparable interim financial information for non–Ind AS entities. Proper presentation of comparative data, segment details, EPS, and income tax ensures compliance. Strong internal controls and consistent policies help produce reliable mid-year results.
Action Points
Confirm whether AS 25 or Ind AS 34 applies.
Prepare estimates with documentation.
Disclose EPS, segment data, and comparative figures.
FAQs
1. What is AS 25 of ICAI?
It is the Accounting Standard for interim financial reporting for non–Ind AS entities.
2. Do listed companies always apply AS 25?
No. Listed companies under Ind AS must use Ind AS 34. Only non–Ind AS listed entities use AS 25.
3. Are comparative figures required?
Yes. AS 25 requires previous interim period and previous year-end comparatives.
4. What EPS details must interim reports show?
Both basic and diluted EPS must appear if presented in annual statements.
5. How is interim tax calculated?
It uses the estimated annual average tax rate applied to year-to-date income, adjusted for discrete items.
For detailed/official copy:
AS 25 of ICAI (As on 01/04/2025): Interim Financial Reporting
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