Event affecting Going concern concept
This query is : Resolved
07 October 2008
hi
i want know whether the Event affecting Going concern concept is an adjusting event or non adjusting event.
i want know whether the Event affecting Going concern concept is an adjusting event or non adjusting event.
CA. AMIT AGARWAL
(Expert)
08 October 2008
Hi rahul,
As per AS-4 "Contingencies & Events occuring after Balance Sheet date", an event is said to be adjusting if the contingency existed on the balance sheet date. No matter whether the contingency affect the going concern or not.
However where any event has occured which changes our fundamental assumptions of Going concern the accounts should be prepared on liquidation basis and not on going concern basis. e.g. Fixed Assets to be depreciated over the remaining life of the business & etc.
As per AS-4 "Contingencies & Events occuring after Balance Sheet date", an event is said to be adjusting if the contingency existed on the balance sheet date. No matter whether the contingency affect the going concern or not.
However where any event has occured which changes our fundamental assumptions of Going concern the accounts should be prepared on liquidation basis and not on going concern basis. e.g. Fixed Assets to be depreciated over the remaining life of the business & etc.
CA. AMIT AGARWAL
(Expert)
11 October 2008
1
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