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Going Concern

Covid-19

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Is anyone including a Covid-19 based going concern note to company accounts ?

I have a company which will, no doubt, be affected but I (and the directors, whose view matter more, of course) would be surprised if it forced the company into liquidation.  In these uncertain times, would it be wise to specifically say that the directors consider the company to be a going concern ?

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By fawltybasil2575
20th May 2020 15:13

@ Lion.

You may find useful the very recent ICAEW/ICAS guidance, here:-

https://www.icaew.com/-/media/corporate/files/about-icaew/press-release-...

Basil.

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Replying to fawltybasil2575:
RLI
By lionofludesch
20th May 2020 15:44

Thanks, Basil. Typically vague, isn't it ?

I think I'm going to mention Covid-19 and say that the board think it'll all be grand a few months from now. There'll definitely be a reduction in 2020 profits but the company will more than likely survive.

To be fair, it's not like folk won't have noticed that there's a virus about, is it ?

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By jonharris999
21st May 2020 10:42

Was musing on this in conversation with a colleague (OK, competitor) just before you posted this and we co-mused that from now on presumably this becomes almost standard.

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Replying to jonharris999:
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By lionofludesch
21st May 2020 10:55

I reckon it's good to show you've considered it.

Even if you've rejected it.

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By fawltybasil2575
21st May 2020 12:01

There is a useful reminder of the basic principles of "Going Concern", on AWEB, here:-

https://www.accountingweb.co.uk/business/financial-reporting/going-conce...

As the first (currently only) respondent to that article states, the article is relevant to Financial Statements generally (ie not just to "Audit").

I foresee that "Going Concern" will, over the next (say) 24 months, become an aspect which increasingly will require careful consideration, in view of the number of companies which will be severely adversely affected by Coronavirus.

If you are a member of ICAEW, there was a very good article, in March 2020, on "Going Concern", from the Financial Reporting Faculty - it provided useful comment on the relevance of viewing the position as at the Accounts date.

The article distinguished the DIFFERENT requirements between companies with year-ends of 31 December 2019 and the following three or four months (ie in the context of the considerable changes, over those few months, in the perception of the likely impact of the virus, on the company, over the critical period of 12 months immediately after the accounting year-end).

Basil.

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