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Is going concern a GAAP?

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Is going concern a GAAP?

Under IFRS Standards, financial statements are prepared on a going concern basis, unless management intends or has no realistic alternative other than to liquidate the company or stop trading. Similarly, US GAAP financial statements are prepared on a going concern basis unless liquidation is imminent.

What is the going concern basis of accounting?

Going concern is an accounting term for a company that is financially stable enough to meet its obligations and continue its business for the foreseeable future. Certain expenses and assets may be deferred in financial reports if a company is assumed to be a going concern.

Does UK follow IFRS or GAAP?

The new UK GAAP standard is FRS 102, ‘The financial reporting standard applicable in the UK and Republic of Ireland’. It is based on the IFRS for SMEs, a simplified IFRS standard developed by the International Accounting Standards Board for non-publicly accountable entities.

What should a going concern assessment include?

Going concern considerations, including financing challenges.

  • Revising budgets and forecasts.
  • Financing challenges. Management should reassess the availability of financing because it may not be easily replaced and the costs may be higher in the current circumstances.
  • Subsequent events.
  • Disclosures.

    • Does UK have GAAP?

    Generally Accepted Accounting Practice in the UK (UK GAAP) is the body of accounting standards published by the UK’s Financial Reporting Council (FRC).

    Is going concern a business risk?

    Business risks include risks that could reduce the company’s profit and/or cash inflows, and could ultimately mean that either a company is not a going concern, or that there are significant doubts over its ability to continue as a going concern.

    Is a going concern assessment required?

    Under generally accepted accounting principles in the United States, entities have been required to consider going concern since 2014 and auditors have been required under their professional standards to evaluate their client’s ability to continue as a going concern for much longer than that.

    Which of the following statements regarding the going concern concept is true?

    The correct answer is B. The going concern concept assumes that the business will continue for the foreseeable future.

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