Andrew Vials: going concern

The Sharman Panel consultation raises serious questions about the future of going concern, says KPMG’s Andrew Vials

The Financial Reporting Council (FRC) recently published its consultation implementing the recommendations of the Sharman Panel on going concern reporting. Sharman’s key recommendations, embodied in the draft guidance, are that listed companies make extensive ’front end’ narrative disclosures of their going concern assessment, that the going concern disclosures should include a longer term assessment of risks to the business model and solvency, and that the assessment should be more broadly based and integrated on a continuous basis with the management of risks and strategy setting. In addition, Sharman recommended the retention of the existing regime for the basis of accounting and auditors’ emphasis of matter.