The IFRS Foundation has released a significant revision to its educational material supporting the application of going concern requirements under IFRS Standards. This update ensures the guidance reflects the latest developments, most notably the introduction of IFRS 18 ‘Presentation and Disclosure in Financial Statements’.
Purpose & Scope:
The material assists entities in consistently applying IFRS requirements mandating an assessment of their ability to continue as a going concern when preparing financial statements. It consolidates relevant guidance and demonstrates practical application through real-world scenarios. Crucially, it does not introduce new requirements but aims to enhance understanding and promote consistent application of existing standards.
Key Revisions:
- Integration of IFRS 18: The material has been updated to align with and reflect the requirements introduced by the new IFRS 18 standard.
- Reference to Revised ISA 570: Outdated references to prior auditing projects have been removed. The material now cites the finalized Revised International Standard on Auditing (ISA) 570 (Revised) ‘Going Concern’, issued by the IAASB in December 2024, which specifically addresses the auditor’s responsibilities.
- Consolidation and Clarity: The update streamlines guidance and incorporates lessons learned since the material’s original publication in 2021.
Significance:
This revised educational resource provides timely support for preparers, auditors, and regulators navigating the going concern assessment within the current IFRS framework, particularly in light of the adoption of IFRS 18. It serves as a practical tool for understanding the interplay between financial reporting and auditing standards on this critical area.
Source: IFRS Foundation, 13 May 2025.