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sir if company could not prepare accounts in going concern basis what should they do? how to prepare financial position and profit loss. ?
if they cannot prepare the financial statements on a going concern basis , they should state clearly the basis upon which they prepare their statements.More likely than not if they cannot prepare their statements on going concern basis, it means they are not continuing in business in the foreseeable future .This indicate that they are liquidating the company or a term called breaking up at F8.Therefore the basis of accounts preparation is break-up basis.
Yes. If it appears inevitable that the company will not survive the FS must be prepared on a break-up basis.
Assets will be values at their net realisable values. Additional liabilities might have to be recognised (eg redundancy payments). The sales and costs that occurred during the year will still be there but there are likely to be additional costs that have to be recognised because of the impending break-up of the business.
If we have applied for loan let’s say $50m and we did there is uncertainty of receiving loan. so there is risk that business would not continue in going concern basis. what should be the auditor response for this risk and how would we account for that risk and response in financial statements?
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