Going concern is one the fundamental assumptions in accounting on the basis of which financial statements are prepared. Financial statements are prepared assuming that a business entity will continue to operate in the foreseeable future without the need or intention on the part of management to liquidate the entity or to significantly curtail its operational activities. Therefore, it is assumed that the entity will realize its assets and settle its obligations in the normal course of the business.
The two most common reporting entities are a single legal entity preparing unconsolidated or company accounts or a group of legal entities preparing consolidated financial statements. Consolidation can be done at different levels, the most common being at the ultimate parent legal company level (the highest legal entity that controls any number of other legal entities) or at a sub-holding level by a reporting entity obliged to consolidate all legal entities it controls at this level.
A reporting period is the span of time covered by a set of financial statements, normally a year from 1 January Year to 31 December Year. The reporting period also called accounting period can also be for a interim period either for a month or quarter. Reporting entities consistently use the same reporting periods from year to year, so that their financial statements can be compared to the ones produced for prior years.
The objective of financial statements is to provide financial information about the reporting entity’s assets, liabilities, equity, income and expenses that is useful to users of financial statements in assessing the prospects for future net cash inflows to the reporting entity and in assessing management’s stewardship of the entity’s economic resources.
A content page of IFRS Financial Statement may look similar to the following content listing:… Read more