contained requirements about what to disclose about material uncertainties (including objectives for the disclosure and defining more clearly the threshold for disclosure). IAS 1 states 'When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. This site uses cookies to provide you with a more responsive and personalised service. The standard requires a complete set of financial statements to comprise a statement of financial … Please read, Asset disposals and discontinued operations, Classification of liabilities — Effective date, Disclosure initiative — Principles of disclosure, Financial statement presentation — Comprehensive project, Financial statement presentation — Financial statements and comparatives, Financial statement presentation — Other comprehensive income, IAS 24 — State controlled entities and definition of 'related party', IAS 34 — Disclosures in interim reporting periods, IFRS 5 — Definition of 'discontinued operations', IFRS for SMEs — Comprehensive review 2012-2014, Reporting comprehensive income (performance reporting), IAS 1 — Disclosure requirements about an assessment of going concern, IASB Chairman and Senior Technical Directors’ reports, IAS 1 — Assessment of going concern (IASB only), IAS 1 — Disclosures requirements about assessment of going concern, IAS 1 — Presentation of Financial Statements, Agenda for November 2013 Global Preparers Forum meeting, IASB's updated work plan formalises plans for finalisation of standards, defers a number of projects, Video of a panel discussion on the future of IFRS in Africa. Date recorded: 29 Jan 2014. hyphenated at the specified hyphenation points. In particular: Hearing the broad concerns over drafting, the Committee Chair, who attended the meeting, suggested that volunteering Board members could act as advisers to assist the staff/Committee in further developing the wording of the proposals. They saw the proposals (particularly those included in paragraph 25C of the draft proposals) as introducing a disclosure requirement associated with general business risk as opposed to going concern risk. The Interpretations Committee received a submission requesting clarification about the disclosures required in relation to material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern. retained, substantially unchanged, the guidance relating to going concern as a basis for the preparation of the financial statements; provided guidance on how to identify material uncertainties, and. The staff intend to bring back revised proposals to a future meeting. IAS 1 requires the management to assess whether an entity is a going concern, that is: whether the management does not intend to liquidate the entity or to cease trading, or have any realistic alternative but to do so. IAS 1.25-1and IAS 10.14-1 - Financial statements prepared on a basis other than a going concern basis Issue : Can financial statements prepared on a basis of accounting other than a going concern basis be described as in compliance with IFRS? 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 … IAS 1 . It is one of the basic assumptions described in IAS 1 Presentation of financial statements. The Board may revisit this topic at a future meeting. An entity shall 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. This standard requires that when management is aware of material uncertainties about an entity’s ability to continue as a going concern, those uncertainties shall be disclosed. Given Board deliberations and next steps following the Board’s discussion of disclosure requirements for an assessment of going concern, the Board decided not to discuss this paper. Under GAAP, the standard regarding going concern is defined under AU Section 341. Some of those concerns were fundamental disagreements with the need for an amendment. IAS 1 paras 122.125, separate disclosure of judgements and estimates, including going concern because of change of control provisions IAS 1, paras 122, 125, 129, judgements and estimates separately identified with sensitivities including COVID – 19 20 March 2020 An entity shall 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. Each word should be on a separate line. These words serve as exceptions. For this purpose, it provides overall requirements for the structure and contents of financial statements along with some general features. At the Committee’s direction, the staff prepared proposed amendments to IAS 1 which: The Committee also decided to propose that a question be included in the exposure draft about whether the proposed amendments should include the alignment of the going concern assessment time frame in IAS 1 with the time frame set out in many local auditing requirements (e.g., whether to align the quoted going concern assessment timeframe in IAS 1 (at least twelve months from the end of the reporting period) with that of International Standard on Auditing (ISA) 570 Going Concern (at least twelve months from the date of the financial statements). If there are any material uncertai… By using this site you agree to our use of cookies. If yes, can an entity deviate from individual paragraphs of IFRSs as needed to reflect the Share SHARE . IAS 1.26 “In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Going concern is addressed in paragraph 25 of IAS 1: 25 When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. After a lengthy debate, the staff suggested exposing the larger subset of proposals in order to receive constituent views. [Refer: IAS 10 paragraphs 14-16] The degree of consideration depends on the facts in each case. Material uncertainties that cast significant doubt on the company’s ability t… requires management to disclose material uncertainties related to events or conditions that may cast significant doubt upon an entity’s ability to continue as a going concern. A company is no longer a going concern if management either intends to liquidate the company or cease trading, or has no realistic alternative but to do so. Multiple Board members suggested that disclosure requirements in paragraphs 122 and 123 of IAS 1 should be closely linked to the proposals so as to provide indicative guidance as to the judgements to consider when determining if material uncertainties about an entity’s ability to continue as a going concern should be disclosed. The staff presented a proposed draft amendment to IAS 1. The Committee noted that IAS 1 provides sufficient guidance on the disclosure requirements on uncertainties related to an entity’s ability to continue as a going concern and that it does not expect diversity in practice. Current events and . a going concern, and standards regarding matters to be considered and disclosures to be made in connection with going concern. IAS 1 sets out the purpose of financial statements as the provision of useful information on the financial position, financial performance and cash flows of an entity, and categorizes the information provided into assets, liabilities, income and expenses, contributions by and distribution to owners, and cash flows. The Board discussed the proposed amendments by the Committee seeking clarification on the disclosure requirements about the assessment of going concern in IAS 1. … This project has now been incorporated into the IASB's project on the IAS 1 disclosure initiative. What is going concern? However, IFRS [in International Accounting Standards (IAS) 1, Presentation of Financial Statements] differs from U.S. GAAP by requiring management to consider a time period of at least one year, whereas U.S. GAAP sets an upper limit at one year. 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