What the directors have to state to clearly show that the going concern assumptions has been adopted in the financial statements..??
What the directors have to state to clearly show that the going concern assumptions has been adopted in the financial statements..??
CA Manish
(Job)
(5264 Points)
Replied 26 October 2012
As per accounting Standard 1 - Disclosure of Accounting Policies
Certain fundamental accounting assumptions underlie the preparation
and presentation of financial statements. They are usually not specifically
stated because their acceptance and use are assumed.Disclosure is necessary
if they are not followed.
Going Concern is one of the fundamental Accounting policies which is assumend in preparation of financial statement. Therefore no need of prooving it. If it is not followed then disclosure is necessary.
CA Pooja Agarwal
(Chartered Accountant)
(3228 Points)
Replied 26 October 2012
right now only few example is coming in my mind:
they should be assured that Fixed Assets are shown at their book value/cost less depreciaion/cost less depreciation less impairment loss rather than at it realisable value.
similar is the case for long term investments.
Proper provisions should be created to meet any future contingencies,etc
Praveen Sharma
(Chartered Accountant)
(2045 Points)
Replied 26 October 2012
The Company can take classification into capital & revenue.
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