Going Concern is Still Going!

Summary of FASB Decisions Reached to Date (As of 01/13/10)

Based upon discussions surrounding issues raised in comment letters received on the proposed FASB Statement, Going Concern, and subsequent Board meetings, the Board has decided the following:

1. To provide guidance that defines a going concern.
2. To clarify that the time period for the going concern assessment is not a bright-line 12 months but also is not intended to be an indefinite look-forward period.
3. To broaden the scope of the project to address three additional areas:
   a) Enhancing the disclosures of short-term and long-term risks, specifically risks for which there is more-than-remote likelihood of occurrence.
   b) Defining substantial doubt in terms of an entity’s ability to continue as a going concern.
   c) Developing guidance surrounding the adoption and application of the liquidation basis of accounting.
   

Next Steps

The staff will draft language to clarify the disclosure requirements related to management’s going-concern assessment, including the development of language to replace the term substantial doubt, and develop guidance surrounding the liquidation basis of accounting. The Board will review these developments and decide whether it will issue a revised Exposure Draft by the end of the first quarter of 2010.