PracticeAccounting FirmsCompany fears over FRC’s ‘going concern’ plan

Company fears over FRC’s ‘going concern’ plan

Companies are concerned FRC’s proposal to reveal significant doubts whether a business was a going concern

Companies have expressed concern that extensive disclosures could unsettle
investors fololowing the
Fincance Reporting
Council
’s proposal that directors should lay out clearly any significant
doubts over whether a business was a going concern.

‘We’re wary about rushing on such a key area,’ John Pierce,
Quoted
Companies Alliance
chief executive, told the Financial Times. ‘We
are studying it to determine whether it means a change in substance or in form.

‘If substance, then it could have all sorts of unintended consequences and
perhaps precipitate the demise of a business that, without veiled warnings,
could pull through.’

Some experts question the need for a fourth category in the updated guidance.
‘They could just use the new tougher language and replace the middle one – it’s
not clear why a fourth one is needed,’ Steve Priddy of the
Association of Chartered
Certified Accountants
, said.

Further reading:

Companies urged to clarify risks of failure

Read
the Financial Times story

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