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. IAS1 : Going concern. The Committee previously considered a request for clarification on the disclosure requirements about the assessment of going concern in IAS 1. 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. If yes, can an entity deviate from individual paragraphs of IFRSs as needed to reflect the The scope of the Committee’s discussions were limited to two specific elements – when an entity should be required to disclose information about material uncertainties and what to disclose about the uncertainties. An update on the operation of the Accounting Standards Advisory Forum (ASAF) was received, and various IASB projects were discussed. Structure and Content. Going concern considerations, including financing challenges Management is required to assess a company’s ability to continue as a going concern. 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. The Committee considered a request a request on whether the disclosures required by IAS 1 Presentation of Financial Statements on 'material uncertainties related to events or conditions that may cast a significant doubt upon the entity's ability to continue as a going concern' should be enhanced. 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 It means that the financial statements are prepared under the assumption that the entity will continue its operations in the foreseeable future (at least 12 months). This site uses cookies to provide you with a more responsive and personalised service. Sign in … Partner, Department of Professional Practice, Audit KPMG in Canada. … By using this site you agree to our use of cookies. 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 full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. 205-40-05-1Continuation of an entity as a going concern is presumed as the basis for financial reporting unless and until the entity’s liquidationbecomes imminent. IAS 1 — Assessment of going concern (IASB only) Date recorded: 21 Mar 2013. 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. These words serve as exceptions. [Refer: IAS 10 paragraphs 14-16] The degree of consideration depends on the facts in each case. It is one of the basic assumptions described in IAS 1 Presentation of financial statements. Any changes to IAS 1 made subsequent to the IASB’s improvements project have not been incorporated into IPSAS 1. Board members expressed a number of concerns with the proposals. The Committee, at its meeting, recommended that the proposed amendments be presented to the IASB for its consideration. The Board may revisit this topic at a future meeting. hyphenated at the specified hyphenation points. Under GAAP, the standard regarding going concern is defined under AU Section 341. IAS 1 . The Board discussed the proposed amendments by the Committee seeking clarification on the disclosure requirements about the assessment of going concern in IAS 1. The IFRS Interpretations Committee considered feedback on the comment letters received on its tentative agenda decision regarding 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. Specifically, one Board member believed current requirements were clear. Disclosure requirements relating to assessment of going concern (IAS 1 Presentation of Financial Statements)—July 2014. He noted the requirement to disclosure information that enables users of financial statements to understand the effect of any significant future transactions. contained requirements about what to disclose about material uncertainties (including objectives for the disclosure and defining more clearly the threshold for disclosure). The standard requires a complete set of financial statements to comprise a statement of financial … This site uses cookies to provide you with a more responsive and personalised service. 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. A few Board members agreed to act as advisers. IAS 1 Presentation of Financial Statementsrequires management to assess a company’s ability to continue as a going concern. Going concern. conditions may have a significant impact on a company’s ability to continue as a going concern. When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. The IFRS IC had recommended to the IASB that it should make a narrow-focus amendment to IAS 1 to give guidance when an entity should be required to disclose information about material doubts upon the entity’s ability to continue as a going concern. The Committee discussed the staff's recommendations that (a) other matters raised on this topic are too broad to be addressed by the interpretations Committee and (b) that the staff limit their discussions to two areas about the disclosure of material uncertainties about the going concern assessment—(i) when those uncertainties should be disclosed and (ii) what should be disclosed about those uncertainties. 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 1.26] Gabriela Kegalj. 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. The staff intend to bring back revised proposals to a future meeting. Each word should be on a separate line. IAS 1 explains the general features of financial statements, such as fair presentation and compliance with IFRS, going concern, accrual basis of accounting, materiality and aggregation, offsetting, frequency of reporting, comparative information and consistency of presentation.. IAS 1 Presentation of financial statements prescribes the basis for presentation of general purpose financial statements, ... entity’s ability to continue as a going concern • Financial statements shall be prepared on a going concern basis unless management either intends to liquidate the entity or to cease IAS 1 Presentation of Financial Statements sets out the overall requirements for financial statements, including how they should be structured, the minimum requirements for their content and overriding concepts such as going concern, the accrual basis of accounting and the current/non-current distinction. 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. Some of those concerns were fundamental disagreements with the need for an amendment. 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 … 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. 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. For example, International Accounting Standard (IAS) 1 requires management to make an assessment of an entity’s ability to continue as a going concern.1The detailed requirements regarding management’s responsibility to assess the entity’s ability to continue as a going concern and related financial statement disclosures may also be set out in law or regulation. Date recorded: 29 Jan 2014. 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. 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