Читать книгу Wiley GAAP: Financial Statement Disclosure Manual - Joanne M. Flood - Страница 19

The Codification essentially, with some exceptions, mirrors going‐concern requirements for auditors currently found in PCAOB and AICPA standards. Management must perform, at least annually, an evaluation of the entity's ability to continue as a going concern within one year after the financial statements are issued or, when applicable, available to be issued.

Overall Guidance Management must perform two steps:

1 Evaluate, in the aggregate, conditions and events that are known or reasonably knowable at the evaluation date, and

2 Assess whether it is probable that the entity will be able to meet its obligations that are due within one year after the date that the financial statements are issued or available to be issued.(ASC 205‐30‐50‐3 and 50‐4)

The going concern probability threshold is the same used for accounting for contingencies—more likely than not.

Consideration of Management's Plans When making going concern assessments, management may consider mitigating plans to determine whether substantial doubt is alleviated. These plans can be considered only if both of the following conditions are met:

 It is probable that the plan will be effectively implemented with the year.

 It is probable that the plan when implemented will mitigate the conditions or events that raise substantial doubt about going concern.(ASC 205‐ 30‐50‐6 and 50‐7)

In order for these plans to be considered, generally, management or those with authority must approve the plans before the issuance date of the financial statements.

Disclosure Requirements

Management Conclusion	Disclosures
Conditions do not give rise to substantial doubt.	No specific disclosures are required.
Substantial doubt exists but is alleviated by management's plans.	In a separate note or part of another note, for example, on debt, information that enables users to assess:Principal conditions or events that raised substantial doubt,Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations, andManagement's plans that alleviated those concerns. (ASC 205‐40‐50‐12)
After considering all the facts and management's plans, management concludes that substantial doubt remains.	A separate note with:A statement that there is substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued.Disclosures that allow users to understand:Principal conditions or events that raised substantial doubt,Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations. andManagement's plans to mitigate the conditions or events. (ASC 205‐40‐50‐13)
In subsequent years	Present the above disclosures in subsequent financial statements as long as substantial doubt exists. If any changes in conditions or events occur, they should be explained. It is expected that as more is known, the disclosure will become more extensive. If the substantial doubt is resolved in a subsequent period, the entity must disclose how it was resolved. (ASC 205‐40‐50‐14)