What about going concern?
“An entity shall prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading or has no realistic alternative but to do so.” AASB 101
“Deterioration in operating results and financial position after the reporting period may indicate a need to consider whether the going concern assumption is still appropriate” AASB 110
“An entity should not prepare its financial statements on a going concern basis if events after the reporting period indicate that the going concern assumption is not appropriate.” AASB 110
If due to COVID-19, councils have their continued existence put into material doubt, this should be disclosed and in extreme cases, the financials restated to recoverable values. This assessment should take into account all available information about the future, which is at least, but is not limited to, 12 months from the end of the reporting period. The assessment needs to be made at the date the council’s financial report is issued.
Last updated: Monday, Nov 30, 2020