Breathtaking Going Concern In Financial Statements

Audited by Deloitte these financial statements in full on page 2 present the Statement of Financial Condition Ill call this the balance sheet to keep things easy Statement of Activities and Changes in Net Liabilities going with income statement here and Statement of Cash Flows with the accompanying notes for the years ended March 31 2010 and 2009.

Going concern in financial statements. Conceptual Framework paragraph 41 IAS 1 requires management to make an assessment of an entitys ability to continue as a going concern. The going concern concept of accounting is of great importance for accountants because if a company is a going concern it must prepare its financial statements in accordance with applicable financial reporting framework such as generally accepted accounting principals applicable in United States of America US-GAAP and international financial reporting standards IFRS. Financial statements unless and until the entitys liquidation becomes imminent.

It assumes that the entity will continue to remain in business for the foreseeable future. A company is no longer a going concern if management either intends to liquidate the company or cease trading or. Going concern considerations including financing challenges Management is required to assess a companys ability to continue as a going concern.

Going concern is an accounting term for a company that has the resources needed to continue operating indefinitely until it provides evidence to the contrary. Assessing going concern for financial reports. It says that all entities have to prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading or has no realistic alternative but to do so.

Conversely it also means that the entity does not plan to or expect to be forced to liquidate its assets. Illustration 1 Unmodified Opinion When a Material Uncertainty Exists. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting.

Going concern assumption 2. The Conceptual Framework notes that financial statements are normally prepared assuming the entity is a going concern and will continue in operation for the foreseeable future. What is going concern.

However IAS 1 also contains overarching requirements that would require additional information regarding an entitys ability to continue as a going. When preparing financial statements management shall make an assessment of the entitys ability to continue as a going concern. If and when an entitys liquidation becomes imminent financial statements should be.