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COVID 19 IMPACT ON GOING CONCERN

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CA Sapna Ghelani

Chartered Accountant

7550 Points Posted on 06 March 2021

In the scenario of COVID-19 there are significant uncertainties about the future economic scenario. How does an entity determine whether it is still a going concern? What disclosures are required to be made in the financial statements in this regard?

Replies (3)

Quick Summary

The COVID-19 pandemic has introduced significant economic uncertainties, raising questions about a company's ability to continue as a going concern. This discussion explores how entities should determine their going concern status amidst these challenges. It highlights key areas requiring disclosure in financial statements, including obsolete inventory, PPE impairments, trading losses on financial instruments, and impaired receivables, referencing relevant auditing standards like SA 570.

yasaswi gomes

My grammar is 💯 good I

7306 Points Posted on 06 March 2021

Mainly related issues would be

obsolete inventory- check disclosure

PPE impairments- check disclosure requirements

Financial instruments trading losses- check disclosure requirements

impairment of receivables- check disclosures

all the disclosures are available online or icia website.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 06 March 2021

Auditor should hold discussion with top level management and should evaluate all the financial statements of previous years to check whether all the operations of the management are going or not whether it casts any significant doubt on the going concern concept of the company as per SA 570. Auditor should evaluate the debtors and creditors statements including stock receiving and issuing register also if manufacturing areas are properly operating or not