What is an Interim Statement?
An interim statement is a financial report covering a period of less than one year. Interim statements are used to convey the performance of a company before the end of normal full-year financial reporting cycles.
Unlike annual statements, interim statements do not have to be audited. Interim statements increase communication between companies and the public and provide investors with up-to-date information between annual reporting periods.
These may also be referred to as interim reports.
The Role of Interim Statements in Capital Markets
Interim statements allow investors to receive timely updates on a company’s operations and financial performance, which, in turn, influences investor’s capital decisions. For example, if a company exceeds expectations by reporting much higher sales in a particular quarter, investors are likely to be impressed and therefore invest more money in the company’s shares, and vice versa.
By providing a more frequent look at a company’s performance than annual statements, interim statements ensure that investors have the information required to make decisions on their allocation of capital. As a result, they ensure that the capital market remains liquid throughout the year.