In depth: FASB defines management’s going concern assessment and disclosure responsibilities

In depth Sep 23, 2014

The FASB issued new guidance which defines management's going concern assessment and disclosure responsibilities.

Overview

On August 27, 2014, the FASB issued a new standard which requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Disclosures are required when conditions give rise to substantial doubt. Substantial doubt is deemed to exist when it is probable that the company will be unable to meet its obligations within one year from the financial statement issuance date. “Probable” is used similar its current use in U.S. GAAP for loss contingencies. The new standard applies to all companies and is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter.

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Pat Durbin
US Standard Setting Leader, National Professional Services Group
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