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A going concern is an accounting term for a business that is assumed will meet its financial obligations when they become due. It functions without the threat of liquidation for the foreseeable future , which is usually regarded as at least the next 12 months or the specified accounting period (the longer of the two).
IAS 10 requires an entity to adjust the amounts recognised in its financial statements to reflect adjusting events after the reporting period. [7] For instance, the settlement after the reporting period of a court case that confirms that the entity had a present obligation at the end of the reporting period. [8]
It lists the set of statements, for example the statement of financial position and statement of profit and loss, that together comprise the financial statements. [1] IAS 1 also elaborates on the following features of the financial statements: fairly presented and compliant with IFRSs; prepared on a going concern basis;
However, if the auditor considers that the auditee is not a going concern, or will not be a going concern in the near future, then the auditor is required to include an explanatory paragraph before the opinion paragraph or following the opinion paragraph, in the audit report explaining the situation, [8] [9] which is commonly referred to as the ...
Emphasis of matter is a type of paragraph in an auditors' report on financial statements.Such a paragraph is added to indicate a matter which is disclosed appropriately in the notes forming part of the financial statements that the auditor considers is fundamental to the users' understanding of the financial statements.
Substance over form is an accounting principle used "to ensure that financial statements give a complete, relevant, and accurate picture of transactions and events". If an entity practices the 'substance over form' concept, then the financial statements will convey the overall financial reality of the entity (economic substance), rather than simply reporting the legal record of transactions ...
In bookkeeping, an account refers to assets, liabilities, income, expenses, and equity, as represented by individual ledger pages, to which changes in value are chronologically recorded with debit and credit entries.
International Standards on Auditing (ISA) are professional standards for the auditing of financial information. These standards are issued by the International Auditing and Assurance Standards Board (IAASB).