Please enable JavaScript.
Coggle requires JavaScript to display documents.
Preparation of Financial Statements - Coggle Diagram
Preparation of Financial Statements
Going Concern Basis
Entity will realize its assets and discharge its liabilities in the normal course of business
Financial Indicators
Net liability position
Fixed term borrowings approaching maturity without realistic prospects of renewal or repayment
Withdrawal of financial support by creditors
Negative operating cash flows
Adverse key financial ratios
Substantial operating losses or significant deterioration in the value of assets used to generate cash flows
Operating Indicators
Management intentions to liquidate or cease operations
Loss of key management without replacement
Loss of a major market, key customers, license, or principal suppliers
Labour difficulties
Shortages of important supplies
Emergence of highly successful competitor
Break-up Basis
Used when going concern basis is not appropriate anymore
Impact
NCA and liabilities being reclassified as current
Asset values stated as their realizable value
More liabilities may arise
Extra provisions may be necessary