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Going concern reporting likely to change

FASB is proposing a change to reporting on a going concern.

The Financial Accounting Standards Board recently issued an action alert regarding a change in its position on one aspect of financial disclosures.

On April 11,

The Financial Accounting Standards Board recently issued an action alert regarding a change in its position on one aspect of financial disclosures.

On April 11, FASB announced it would not require "qualitative disclosures related to an entity’s ability to remain a going concern that would supplement the proposed quantitative disclosures about liquidity risks." The agency decided the additional information requirement would necessitate a collaborative effort between FASB and other organizations.

During the initial phase of the accounting standards' adoption, FASB proposes organizations apply the new requirements on something of a trial basis with their ongoing comparative disclosures. FASB will draft a written version of its proposal for public review and voting. Rather than impose a start date for the new rules, FASB has decided to ask respondents how much time they would need to implement changes.

In 2011, the United Kingdom's Financial Reporting Council launched an investigation into the experience of companies and auditors when addressing risks related to going concern and liquidity. Among the resulting recommendations, the FRC said it should "seek to harmonize, and to clarify, the common purpose of the going concern assessment and disclosure process in the Code and related guidance for directors and auditors."