...Going Concern issues in financial reporting: a guide for companies and directors Published in 2009 by: Australian Institute of Company Directors (AICD) Level 2 255 George Street Sydney NSW 2000 Telephone: (+61 2) 8248 6600 Facsimile: (+61 2) 8248 6633 www.companydirectors.com.au publications@companydirectors.com.au Auditing and Assurance Standards Board (AUASB) Level 7 600 Bourke Street Melbourne VIC 3000 Telephone: (+61 3) 8080 7400 Facsimile: (+61 3) 8080 7450 enquiries@auasb.gov.au www.auasb.gov.au © Australian Institute of Company Directors (AICD) © Auditing and Assurance Standards Board (AUASB) © Financial Reporting Council (UK) 2009. Portions of this publication have been adapted and reproduced from an Auditing Practices Board Bulletin: Going Concern Issues During the Current Economic Conditions (December 2008) with the kind permission of the Financial Reporting Council (UK). All rights reserved. For further information please visit www.frc.org.uk or telephone +44 (0)20 7492 2300. © Portions of this publication have been adapted and reproduced from a KPMG Flash Report: How Concerned Should Directors be with Going Concern? (February 2009) with the kind permission of KPMG. All rights reserved. Typeset by Endnote design Printed by Ligare Pty Ltd National Library of Australia Cataloguing-in-Publication entry Going Concern issues in financial reporting: a guide for companies and directors/AICD, AUASB ISBN 9781876604158 (pbk.). 9781876604172...
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...'Definition of the 'going concern' concept The 'going concern' concept directs accountants to prepare financial statements on the assumption that the business is not about to go broke or be liquidated (i.e. where the business closes and sells all the assets for whatever price they can get). So, unless there is significant evidence to the contrary, accountants will base their valuations and their reporting of financial data on the assumption that the business will remain in existence for an indefinite period. An indefinite period means the foreseeable future or long enough for the business to meet its objectives and to fulfill its commitments. It is important to note that the 'going concern' concept does not imply or guarantee that the business is profitable and will remain so for the foreseeable future. So, the 'going concern' concept assumes that the business will remain in existence long enough for all the assets of the business to be fully utilized. Utilized assets means obtaining the complete benefit from their earning potential. (i.e. if you recently purchased equipment costing $5,000 that had 5 years of productive/useful life, then under the going concern assumption, the accountant would only write off one year's value $1,000 (1/5th) this year, leaving $4,000 to be treated as a fixed asset with future economic value for the business). The 'going concern' concept supports the assumption that when a business buys assets like land, equipment, and buildings, it does...
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...Going concern concept The going concern concept assumes that an enterprise or the accounting entity has an indefinite or unlimited life or existence. It means that the intention of the business is to carry for a sufficiently long period of time to carry out its existing activities and commitments. It will not be liquidated or dissolved in the immediate future unless there is clear evidence or a specific instruction to the contrary. For Example: - where the venture is for a specific purpose like setting up a stall in an exhibition or fair or the construction of a building or bridge etc. under a contract, the business comes to an end on the completion of the project. Experience indicates that in spite of several business failures, enterprises have a fairly high continuance rate; certain entities have been in existence for more than a century even though the owners have changed. The business entities are therefore going concerns in the majority of the cases and it has proved useful to adopt continuity assumption for accounting purposes. Advantages 1. It provides a sound basis for the income or profit measurement. It means that the items which provide future economic benefit or which are used for more than one year are recorded a fixed assets rather than as expenses only because of the going concern assumption. 2. The going concern assumption facilitates the classification of assets and liabilities into short-term and long-term respectively 3. It is due to the...
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...REPORTING DATE CIA 1003 INTERMEDIATE FINANCIAL ACCOUNTING AND REPORTING CAEA 1214 FINANCIAL ACCOUNTING AND REPORTING II Semester 2, 2015/2016 Learning outcome • Determine the different types of events after the reporting period in accordance with MFRS110. • Apply MFRS 110 to account for events after the reporting period either to: • Make adjustments in the financial statements • Prepare the necessary disclosures • Present the different types of events after the reporting period in the financial statements in compliance with MFRS110. Lecture outline • Introduction • Definitions • Types of Events -Adjusting Events -Non Adjusting Event • Other Issues -Date of authorization for issue -Dividends -Going concern -Disclosure Introduction • Bursa Malaysia requires large publicly traded companies to lodge their unaudited financial statements within 2 months of fiscal year-end and full financial statements within 4 months • Business continues during this “subsequent period” and events could take place that have an impact upon the firm’s financial statements for the preceding year • These events are referred to in the accounting literature as subsequent events or post-balance sheet events. Introduction • The IASB has released IAS 10, dealing specifically with the accounting for subsequent events. • IAS 10 requires that companies adjust the reported amount of assets and liabilities if events occurring after the balance...
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...seems like it is at a point where the auditor substantially believe that’s more likely than not the client they are auditing with cease to operate within the year and there won’t be any sort of doubt which could greatly hurt a company. Some information the auditor needs to determine this likelihood is the ability to pay back debt as it becomes due without having to sell assets outside of the course of business (a retailer selling their goods wouldn’t count), a debt restructure to meet obligations, or having to revise business operations. 1b) Upon determining that there is substantial doubt about going concern the auditor should obtain information from the management that contains plans intended to mitigate this assertion then assess those the likelihood that those plans can be effective and actually work. After this he should consider the adequacy of disclosure about the going concern and include an explanatory paragraph to reflect the decision. 1c) Specific areas that the auditor should focus on regarding managements plans are plans to dispose of assets, borrow money or restructure debt, reduce or delay expenditures, increase ownership equity. 1d) If the auditor determines that there is substantial doubt about the entities ability to continue as a company the auditor should give an unqualified opinion with an explanatory paragraph disclosing this information. 1e) If the auditor determines that there is not substantial doubt he needs to consider the need for disclosure and possibly...
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...No. 2014-15 August 2014 Presentation of Financial Statements— Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern An Amendment of the FASB Accounting Standards Codification® The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. An Accounting Standards Update is not authoritative; rather, it is a document that communicates how the Accounting Standards Codification is being amended. It also provides other information to help a user of GAAP understand how and why GAAP is changing and when the changes will be effective. For additional copies of this Accounting Standards Update and information on applicable prices and discount rates contact: Order Department Financial Accounting Standards Board 401 Merritt 7 PO Box 5116 Norwalk, CT 06856-5116 Please ask for our Product Code No. ASU2014-15. FINANCIAL ACCOUNTING SERIES (ISSN 0885-9051) is published quarterly by the Financial Accounting Foundation. Periodicals postage paid at Norwalk, CT and at additional mailing offices. The full subscription rate is $242 per year. POSTMASTER: Send address changes to Financial Accounting Standards Board, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116. | No. 404 Copyright © 2014 by Financial Accounting Foundation. All rights reserved. Content copyrighted by Financial...
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...Mini- Case: Going- Concern Reporting. Refer to the mini-case “GM: Running on Empty” on page C11 and respond to questions 1– 6. 1. Reviewing GM’s financial information in GM Exhibit 1 and its stock price in GM Exhibit 2 , when do you first see signs of GM’s impending financial distress? 2. In referencing professional standards, what factors should auditors consider in evaluating potential going- concern uncertainties? 3. Considering your response to questions 1 and 2, do you believe that the going- concern uncertainty was warranted? Do you believe that Deloitte & Touche should have issued a going- concern opinion prior to 2008? 4. What economic factors existing in the United States during 2008 might have accelerated Deloitte & Touche’s decision to issue an audit opinion modified to disclose going- concern uncertainties? 5. Do you believe that the events immediately following GM’s bankruptcy alleviated the concerns that led to the issuance of the going- concern uncertainty? What issues would auditors need to consider in evaluating the ability of General Motors Co. (the new GM) to continue as a going concern? 6. Many companies believe that a going- concern opinion is a self- fulfilling prophecy ( that is, when a company receives a going- concern opinion, customers will not purchase products with warranties, suppliers will not provide short- term credit, and investors and creditors will not invest or loan). Would GM’s going- concern opinion influence your decisions regarding either...
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...Fundamental Design Principles Separation of concerns • To prevent overlapping between components of the system, all “concerns” (aspects and mechanisms) of the system should be separate. The codes for each concern should be separated from the other to prevent co-locating. This also prevents interdependency within the system and helps to maintain the system easily. • This is beneficial in architecture because separation of concerns promotes organization. Each application of a software has a specific code, and separation of these codes leads to an effective and organized layered effect. A software may have business aspects, user interfaces, structure and design codes, etc., there may be more than one application of the software working together. As long as the codes of these mechanisms are separated, there will not be an overlap leading to malfunctioning. Also if each section of a system consists of a specific set of features, going back and modifying or repairing a certain feature is easily done without disturbing other aspects of the system. Single responsibility principle • In a software or system, each module should only have one task or responsibility. Responsibilities can also be described as “reasons for change.” • Each mechanism of the system should only be responsible for one task. Providing multiple tasks for one module can overload that aspect of the system and lead to faults. In an example of opening a browser page, there is a functional aspect and the cosmetic...
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...Empathy is a very important trait in people because it shows that you care about the other person. It shows that you care even if you have went through the same thing. There's also a lot of different kinds of empathy. First of all, there's different kinds of empathy. First there is effective empathy, that is where you can share the emotions of others. Then their is cognitive empathy where you understand the emotion but don’t share them. Like a psychologist who who gets the emotion in a rational way even though client tells them. Last their is emotional regulation in this you can regulate someone’s emotion like a surgeon needs to control their emotions during operating on a patient. Secondly, we need to have empathy to feel someone's emotions....
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...Modularization, Commodization Modularity Definition: Modularity is a very general set of principles for managing complexity. By breaking up acomplex system into discrete pieces—which can then communicate with one another onlythrough standardized interfaces within a standardized architecture (Langlois, 2000) * Modularity is based on a systems theory view of organizations and their processes. It seeks to investigate how a system’s components are ‘coupled’ together and how tight these bonds are. * Modularity is important today because of the increased complexity of modern technology. * The driving normative basis for the investigation is that increased modularity enables the parts of a system to be separated and combined with much greater flexibility, and that such flexibility is desirable. * What is new is the application of the idea of modularity not only to technological design but also to organizational design. * A complex modern society might be made more productive through a modular design of social and economic institutions. * In a world of change, modularity is generally worth the costs. The goal is to find the modularization that minimizes interdependencies and most cleanly decomposes the system. * Innovation that takes place through change in the modules we can call modular innovation. * Handling complex systems become easier if break them up into sub-systems. * Complex product or process composed of smaller sub-systems that can be...
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...I have cried for the world's sorrows, laughed at its joys and been swept away by its endless beauty. I have touched brisk mountain tops and paced tranquil ocean floors. I have witnessed the strength of countless men and women and become part of communities I did not know existed. I fell in love with life and humanity. All this because I jumped. In Hope Against Hope: Three Schools, One City, and the Struggle to Educate America’s Children by Sarah Carr, Geraldlynn says, “I’m not going to go to college as soon as I get out of high school… It’s gonna be a long four years, I want a year off” (Carr 216). The Dillard student guide, Bianca, responded to Geraldlynn’s remark with concern. My mother reacted similarly when she discovered that I wanted to postpone my matriculation into Tulane. Many educators tout taking a gap year, saying that kids who step off after high school to work, travel, volunteer or explore other interests are more mature when they arrive at college and more engaged in their education going forward. Like Geraldlynn, the thought of four more years of arduous classes and strenuous exams seemed unappealing to me. I believe that 18 is an ideal age to explore the world, reflect on personal goals, and prepare to take the next purposeful step in life. Ultimately I did not end up taking a gap year, however, it will be a long-lasting regret. After reading Geraldlynn’s comment about delaying college, I reminisced to the time when I contemplated a year of exploration. Life cannot...
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...cried for the world's sorrows, laughed at its joys and been swept away by its endless beauty. I have touched brisk mountain tops and paced tranquil ocean floors. I have witnessed the strength of countless men and women and become part of communities I did not know existed. I fell in love with life and humanity. All this because I jumped. In Hope Against Hope: Three Schools, One City, and the Struggle to Educate America’s Children by Sarah Carr, Geraldlynn says, “I’m not going to go to college as soon as I get out of high school… It’s gonna be a long four years, I want a year off” (Carr 216). The Dillard student guide, Bianca, responded to Geraldlynn’s remark with concern. My mother reacted similarly when she discovered that I wanted to postpone my matriculation into Tulane. Many educators tout taking a gap year, saying that kids who step off after high school to work, travel, volunteer or explore other interests are more mature when they arrive at college and more engaged in their education going forward. Like Geraldlynn, the thought of four more years of arduous classes and strenuous exams seemed unappealing to me. I believe that 18 is an ideal age to explore the world, reflect on personal goals, and prepare to take the next purposeful step in life. Ultimately I did not end up taking a gap year, however, it will be a long-lasting regret. After reading Geraldlynn’s comment about delaying college, I reminisced to the time when I contemplated a year of exploration...
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...Backward Design : Lesson Plan Title: Future Tense Topic: My Plan Course: English Class: Primary 6 Time: 3 hours Teacher: Ayse Algin | Stage 1: Desired Results | Standard F1.2.1 Write in an exchange in interpersonal communication and how to plan their time.Standard F1.2.4 Write to ask for and give data about themselves, their friends and matters around them. | Understanding: * Student will understand how to make positive sentense in the future tene. * Using future tense is important for things which we willl do future. * If we plan our time we can enjoy with it and we can have time to spent with our friends. * How to make plan for future using future tense. | Essential Questions: * What does the plan mean? * How can you plan your time? * How can you invite your friends to play? * What can we plan our time for? * What kind of job students want to be most? | Students will know… * How to use future tense. * What is structure of future tense. | Students will be able to… * Understand future tense structure. * Write positive sentence in future tense. * Write negative sentence in future tense. * Make question in future tense. | ...
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...LET’S HOPE I wish the way I was living could stop, serving rocks, Knowing the cops is hot when I'm on the block, And I Wish my brother woulda made bail, So I won't have to travel 6 hours to see him in jail, And I Wish that my grandmother wasn't sick, Or that we would just come up on some stacks and hit a lick, And I Wish my homies wouldn't have to suffer, When the streets get the upper hand on us and we lose a brother, And I Wish I could go deep in the zone, And lift the spirits of the world with the words within this poem, And I Wish I could teach a could teach a soul to fly, Take away the pain out cha hands and help you hold them high, And I Wish My hommie Butch was still alive And on the day of his death we had never took that ride, And I Wish that God could protect us from the wrong, so all the soldiers that were sent overseas come home. we would never break, though they devastate, We shall motivate, And we gotta pray, all we got is faith. Instead of thinking about who gonna die to day, The Lord is gonna help you feel better, so you ain't gotta cry today. Sit at the light so long, ...
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...US Department of Labor ------------------------------------------------- Top of Form Bottom of Form U.S. Bureau of Labor Statistics * ------------------------------------------------- Latest Releases » * * ------------------------------------------------- Major Economic Indicators » * njuries, Illnesses, and Fatalities FONT SIZE: PRINT: IIF Injuries, Illnesses, and Fatalities * IIF Homepage * IIF Overview * IIF FAQ * Contact IIF SHARE ON: Important Web Site Notices U.S. Bureau of Labor Statistics | OCWC/OSH, PSB Suite 3180, 2 Massachusetts Avenue, NE Washington, DC 20212-0001 www.bls.gov/IIF/ | Telephone: 1-202-691-6170 | Contact IIF http://www.bls.gov/iif/oshwc/cfoi/osar0016.htm Workplace Homicides Up 50 Percent In The Last Year Dan Fastenberg Jan 28th 2013 9:43AM Updated Jan 28th 2013 11:00AM The massacre at the Sandy Hook elementary school reinvigorated the dormant debate over gun control and how best to stop the gun violence in schools. Now, new research suggests that violence in the workplace also has jumped dramatically, with workplace killings up 50 percent in the past year alone. That would make 2012 the "worst year in about 20 years" for workplace homicides, according to Dr. Larry Barton, president of the Bryn Mawr, Pa.-based American College, an expert in crisis management and violence in corporate America. In a previous interview with AOL Jobs, Barton said that his statistics are based on...
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