财务会计与报告(FAR)[高清网络课程]2018 - 正保会计网校(原中华会计网校)免费试听课堂

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Module 2: Going Concern
1. Background
●In 2014, FASB issued a new standard addressing management responsibilities and disclosures regarding to going concern. （presumed assumption）
●What is going concern?
●An entity is considered to be going concern if it is reasonably expected to remain in existence and settle all its obligations for the foreseeable future.

2. Mgt Responsibility
●Management responsibility to evaluate whether there is substantial doubt about entity’s going concern ability within one year after the date FS is issued.
●Substantial doubt: it is probable that the entity will not be able to meet obligations as they become due.
●Evaluation to be made for each annual and interim reporting period
●Both quantitative and qualitative factors to be considered

3. Mitigating Factors
●If substantial doubt exists, management should consider if the entity’s plans intended to mitigate will be successful in alleviating the substantial doubt.
●Assessment based on
●Effective implementation
●Successful effect
●Examples （Key: Cash!）
●Availability of unused lines of credit
●Renewing or extending due dates of existing loans
●Obtaining additional equity contribution
●Reducing overhead and admin costs

4. Disclosures
Evaluation results and required disclosures

	Evaluation Result	Disclosure
1	No substantial doubt	●No disclosure
2	Substantial doubt alleviated	●Prepared under going concern basis ●Disclose condition/events, evaluations and plans
3	Substantial doubt not alleviated	●Prepared under going concern basis （Remember!） ●State there is substantial doubt ●Disclose condition/events, evaluations and plans

5. GAAP Differences
GAAP V.S. IFRS Differences-3 types

	Area	U.S. GAAP	IFRS
1	Liquidation imminent	Liquidation basis	No guidance on reporting basis
2	Disclosures	Disclosure required even substantial doubt alleviated	Disclosure required when management aware of material uncertainties
3	Covered period	One year from FS issuance date	One year from BS date

财务会计与报告-Jonny Zhang