Going concern - going round in circles!

Monsoon

A company ceased to e a going concern in the accounting period and ceased trading the period after.

I have read various IAS and other documents and come to the conclusion that in the AP i am preparing i need to disclose in a note that the company is not a going concern and say why. But I also need to NOT prepare the accounts in accordance with GC principles and I can't forthelife of me find a list of how to do it differently! I've done an impairment review and adjusted debtors provisions, but is there anything else? Is there a checklist?

GC is so 'normal' that i can't see the woods for the trees when trying took out which accounting principles relate to GC.

Thanks

stefanboro

I am currently studying the F7 module for ACCA and read about preparing accounts for an entity that is not a going concern only last week. It's a kick up the backside that I am now struggling to remember.

All of what you said is correct. Another point is that accounts are no longer prepared on an accruals basis but on a cash basis. I don't have my study books with me so, unless other people answer your question more comprehensively, will post a reply later tonight.

The most relevant standard I can think of is IAS 1 (revised) Presentation of financial statements. This link touches on the subject of the going concern basis but does not outline what to do in the context of an entity not being a going concern.

http://www.iasplus.com/standard/ias01.htm

Monsoon

Thanks Stefan. Yes, I've read IAS1 but as you say it does not say what to do! Thanks for the reassurance that I am on the right lines, and the cash accounting thing, I had wondered about that but not sure. So i would need to reverse the prepayments and claim it on a cash basis. And though i would not include accrued overheads, i would still need to revise provisions to take into accounts debtors, liabilities etc.

So... Will HMRC accept accounts on a cash accounting basis for corporation tax? It will only be a timing difference and both the last AP and the current AP tax will be paid before due and company will be closed.

Thanks for the pointers and good luck with your studies. I'm currently panicing about my ATT exam in 2.5 weeks, I'm freaking out!!

stefanboro

Sorry Monsoon I have been reading my textbook to death but can't find any further guidance then what we have both said above. Good luck!

Monsoon

Thanks for looking Stefan.

I found an article on accountancy students by Steve about GC that mentioned other bases, such as the breakup basis; googling around that has helped me with the wording of the notes. I'm pretty happy with what I'm doing now I think.