FRC opens consultation on going concern guidance revisions

August 8, 2024

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The UK Financial Reporting Council (FRC) opened a consultation on revisions to its standard, Guidance on the Going Concern Basis of Accounting and Related Reporting, a news release said. Once finalised, it will replace the regulator's existing guidance, which was issued in 2016.

The draft guidance will be nonmandatory and is "intended to help companies prepare high-quality, company-specific disclosures about their going concern conclusions and how they were reached", the release said, and should allow investors to understand a company's exposure to and plans to navigate solvency and liquidity risks and provide them with the confidence to allocate capital.

According to the release, the revisions incorporate the requirements or provisions of company law, accounting standards, auditing standards, listing rules, the UK Corporate Governance Code, and other relevant regulation.

Moving forward, the FRC will consult with stakeholders on the proposed revisions, the release said. The comment deadline is 28 October.

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[Financial Management Magazine]