Going Concern - Ind AS - Indian Accounting Standards - Companies Law

Going Concern While preparing financial statements, management should assess the entity s ability to continue as a going concern. In general an entity is assumed to be going concern unless there is significant information to the contrary or there is no realistic alternative. In making such assessment, they should consider all material uncertainties related to events or conditions that may cast significant doubt upon the entity s ability to continue as a going concern, the entity shall disclose those uncertainties. When an entity does not prepare financial statements on a going concern basis, it shall disclose- fact that entity does not have going concern basis on which it prepared the financial statements and the reason why the entity is not regarded as a going concern. If the management believes that an entity may No Longer be a Going Concern that entity should account For all its assets at net realizable value OR on a liquidation basis but not on the historical cost basis It should disclose the basis of preparation of financials; and The difference between carrying amount and net realizable value should be taken to P L a/c. In assessing whether the going concern assumption is appropriate, management considers all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. The degree of consideration depends on the facts in each case. When an entity has a history of profitable operations and ready access to financial resources, the entity may reach a conclusion that the going concern basis of accounting is appropriate without detailed analysis. In other cases, management may need to consider a wide range of factors relating to current and expected profitability, debt repayment schedules and potential sources of replacement financing before it can satisfy itself that the going concern basis is appropriate.