EXISTIng practice and Current reporting requirements for Interim reporting generally follow the Viewpoint*{ Interim reports are an Integral part of annual statements . although the discretE approach is applied to some Most revenues and EXPENSES are recognized using the same accounting principles applicable to annual rep Some modifications are necessary to help cause interim statements to relate better to annual statements ." I! most Evident In the way costs and expenses are recognized . Most are recognized in Interim periods as incy But when an Expenditure clearly benefits more than just the period in which it is incurred , the expense sho allocated among the periods benefited on an allocation basis consistent with the company's annual allocati procedures . For example , annual repair expenses . property tax expense . and advertising expenses Incurred! first quarter that clearly benefit later quarters are assigned to each quarter through the use of accruals and deferrals . Costs and expenses subject to rear - End adjustments , such as depreciation expense , are Estimated allocated to interim periods in a systematic way . Similarly , Income tax expense at each interim date should based on Estimates of the effective tax rate for the whole year . This would mean . for Example , that if the* Estimated Effective rate has changed since the previous interim period ('s ) . the tax expense period would be determined as the new rate times the cumulative pretax income to date . less the total tax expense reported +itart