THE CONCEPT OF GOING CONCERN

An entity prepares financial statements on a going concern basis when, under the going concern assumption, the entity is viewed as continuing in business for the foreseeable future. The term ‘foreseeable future’ is not defined within ISA 570, but IAS 1, Presentation of Financial Statements deems the foreseeable future to be a period of 12 months from the entity’s reporting date.

The concept of going concern is an underlying assumption in the preparation of financial statements, hence it is assumed that the entity has neither the intention, nor the need, to liquidate or curtail materially the scale of its operations. If management conclude that the entity has no alternative but to liquidate or curtail materially the scale of its operations, the going concern basis cannot be used and the financial statements must be prepared on a different basis (such as the ‘break-up’ basis).

編輯推薦：

2015年ACCA考試《審計》精選考點(diǎn)6

（責(zé)任編輯：）

共2頁,當(dāng)前第1頁  第一頁  前一頁  下一頁