RegulationAccounting StandardsFRC issues ‘going concern’ update for small biz

FRC issues 'going concern' update for small biz

FRC says FRSSE update is only issued as guidance and will not put small companies under a heavier reporting workload.

The FRC has taken steps to head off a deluge of businesses issuing going
concern warnings by releasing an update to the standards governing small
companies.

The regulator stressed the Financial Reporting Standard for Smaller Entities
update was issued as guidance and would not put small companies under a heavier
reporting workload.

The FRC said: ‘The effect of current market conditions on individual entities
requires careful evaluation. However, it should not be assumed that the general
economic situation at the present time of itself means that a material
uncertainty exists about a company’s ability to continue as a going concern.’

However, the FRC stressed that companies use of the going concern basis of
accounting involved making judgments, at a particular point in time, about
future events which ‘are inherently uncertain. Those judgments are valid only at
the date of approval of the annual accounts.’

‘The fact that directors prepare accounts on a going concern basis is not
intended to and does not guarantee that a company will continue in existence
until the next annual accounts are published or even until the next balance
sheet date.’

Related Articles

Membership of the accountancy profession on the rise

Accounting Standards Membership of the accountancy profession on the rise

5m 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

1y Kevin Reed, Writer
Sports Direct implements FRC corrections in annual reporting

Accounting Standards Sports Direct implements FRC corrections in annual reporting

1y Stephanie Wix, Writer
Watchdog launches audit investigation into Sports Direct

Accounting Firms Watchdog launches audit investigation into Sports Direct

1y 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

1y Stephanie Wix, Writer
Cashflow statement improvements targeted by watchdog

Accounting Standards Cashflow statement improvements targeted by watchdog

1y Stephanie Wix, Writer
FRC expects Brexit narrative within annual reports

Accounting Standards FRC expects Brexit narrative within annual reports

1y 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

1y Richard Crump, Writer