Thursday, October 21, 2021
The AASB has released a new staff paper Going Concern Disclosures: A Case for International Standard-Setting which identifies potential areas for improvement relating to the existing going concern disclosure requirements in the IFRS Standards.
Specifically, the staff paper serves to:
(a) identify any issues and available evidence regarding the adequacy of going concern disclosures currently required by the Accounting Standards;
(b) identify any issues relating to the lack of guidance on the basis of preparation where the going concern assumption is no longer appropriate; and
(c) suggest to the IASB how to address the issues identified.
Based on the findings of the paper, it is recommended that the IASB:
(a) revisit IAS 1 Presentation of Financial Statements to include specific examples and more explicit step-by-step guidance for preparers on how to assess going concern in the Application Guidance of IAS 1; and
(b) initiate a research project to better understand how regulation in various jurisdictions affect the preparation of financial statements if prepared on a non-going concern basis and the current diversity to assess whether any guidance should be issued.