- 6 Marks
CR – Nov 2014 – L3 – SC – Q6a – Introduction to Corporate Reporting
Evaluate factors indicating going concern threats and propose financial restructuring solutions.
Question
An entity is normally viewed as a going concern. It is assumed that the entity has neither the intention nor the desire of liquidation or of curtailing materially the scale of its operations.
However, if the going concern is threatened, the financial statements would be prepared on a different basis.
Required:
State the factors that indicate an organisation may no longer be a going concern under the following categories:
(i) Financial (ii) Operational (iii) Legal or regulatory (6 Marks)
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