RegulationAccounting StandardsSolvency and liquidity queries tackled in FRC going concern guidance

Solvency and liquidity queries tackled in FRC going concern guidance

FRC guidance makes clear requirements relating to going concern and solvency and liquidity risk

Solvency and liquidity queries tackled in FRC going concern guidance

NEWLY-ISSUED FRC GUIDANCE has brought together requirements of company law, accounting standards, auditing standards, other regulation and existing FRC guidance relating to the going concern basis of accounting.

The guidance also covers, within the context of principal risks and uncertainties disclosed in the strategic report, solvency and liquidity risks.

It also aims to assist directors of companies that do not apply the UK Corporate Governance Code in assessing: The going concern basis of accounting, material uncertainties, solvency and liquidity risk; The periods of assessment; and the relevant disclosure requirements.

Under the requirements, clear and concise reporting is paramount and when thinking about disclosures, directors are encouraged to consider the application of materiality in providing company-specific information.

FRC executive director Melanie McLaren said: “The FRC encourages companies to take a broader longer-term view of the risks and uncertainties facing their business. We have seen an evolution in corporate reporting in recent years. The Sharman Inquiry and the strategic report with its forward looking-orientation have been catalysts for change and it is important for our codes, standards and guidance to remain current against this backdrop. Directors have told us that they welcome practical guidance.”

Related Articles

Membership of the accountancy profession on the rise

Accounting Standards Membership of the accountancy profession on the rise

2m Alia Shoaib, Reporter
Ex-RSM Tenon CEO fined; ex-FD and PwC face complaints over its accounting

Accounting Standards Ex-RSM Tenon CEO fined; ex-FD and PwC face complaints over its accounting

9m Kevin Reed, Writer
Sports Direct implements FRC corrections in annual reporting

Accounting Standards Sports Direct implements FRC corrections in annual reporting

9m Stephanie Wix, Writer
FRC expects Brexit narrative within annual reports

Accounting Standards FRC expects Brexit narrative within annual reports

11m Stephanie Wix, Writer
FRC consults on approach to updating FRS 102 for changes in IFRS

Accounting Standards FRC consults on approach to updating FRS 102 for changes in IFRS

12m Richard Crump, Writer
Watchdog launches audit investigation into Sports Direct

Accounting Firms Watchdog launches audit investigation into Sports Direct

10m Stephanie Wix, Writer
Record fine for Deloitte and audit partner over Aero misconduct

Accounting Standards Record fine for Deloitte and audit partner over Aero misconduct

10m Stephanie Wix, Writer
Cashflow statement improvements targeted by watchdog

Accounting Standards Cashflow statement improvements targeted by watchdog

11m Stephanie Wix, Writer