1. The purpose of this Guidance is to bring together the requirements of company law, accounting standards and the Listing Rules on going concern and liquidity risk for small, medium and large UK companies and to provide further assistance on their application.
2. This Guidance applies to accounting periods ending on or after 31 December 2009. It supersedes the guidance issued in 1994 for directors of listed1 companies and extends the application of the guidance to all sizes of company2 for annual and half‐yearly financial statements.
3. Going concern is a fundamental accounting concept that underlies the preparation of financial statements of all UK companies. Under the going concern concept it is assumed that a company will continue in operation and that there is neither the intention nor the need either to liquidate it or to cease trading.
4. This Guidance provides a framework to assist directors, audit committees and finance teams in determining whether it is appropriate to adopt the going concern basis for preparing financial statements and in making balanced, proportionate and clear disclosures. Separate standards and guidance have been issued by the Auditing Practices Board to address the work of auditors in relation to going concern.
Source: Financial Reporting Guidance
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Going_Concern_and_Liquidity_Risk_Guidance_for_Directors_of_UK_Companies_2009.pdf | 384.00 KB | Indir |
