Professional Documents
Culture Documents
Going Concern assumption – the business shall CONDITION FOR CHANGE IN PRESENTATION
continue to operate indefinitely unless otherwise
proven. When the changed presentation provides
information that is reliable and is more
Presentation of FS relative to Going Concern relevant to users of FS
Make an assestment of the entity’s ability to When the revised structure is likely to
continue as a going concern continue, so that comparability is not
Uncertainties ralated to events , conditions impaired
that may doubt the ability to continue as
going concern shall be disclosed. 1.7 Materiality and Aggregation
Management shall take into account all
available information Materiality- item is considered material when its
Going concern basis of accounting is presence or absence in financial statements will
appropriate without detailed analysis influence the decision of the users.
Considers the ff:
a. Current and expected profitability GUIDELINES IN MATERIALITY AND AGGREGATION
b. Debt repayment schedules
c. Potential sources of replacement Ommission and mistatement of items are
financing material if they coul individually or
collectively, influence the economic decision
Accrual Basis- the effects of transactions and events Materialityy depends on the size and nature
are recognized as they occur and not as cash is of the omission.
received or paid. Each material class of similar items shall be
presented separately in FS
An item that is not sufficiently material to 1.10 Reporting Period
warrant seperate presentation on FS may
nevertheless be sufficiently material to be Financial statements shall be presented at least
presented in note annually.
Specific disclosure requirement in standard
need to be satisfied if the information is not But when the date of an entity changes and annual
material changes are presented longer or shorter that one
year, the entity shall disclose ff:
1.8 Offsetting The reason for using longer/shorter period
The fact that comparative amounts for the
Offsetting – process of deducting the balance of one FS and related notes are not entirely
account from another related account. comparable