Amendments to ASA 570Amendments to ASA 570

Amendments to ASA 570

1. Existing paragraph 3 and footnote 1 are amended to read as follows:

Some financial reporting frameworks contain an explicit requirement for management to make a specific assessment of the entity’s ability to continue as a going concern and include standards regarding matters to be considered and disclosures to be made in connection with going concern. For example, Australian Accounting Standard (AASB) 108101 requires management to make an assessment of an entity’s ability to continue as a going concern.[1] The detailed requirements regarding management’s responsibility to assess the entity’s ability to continue as a going concern and related financial statement disclosures may also be set out in law or regulation. (Ref: Para. A4)

1. Existing paragraph A4 and footnote 17 are amended to read as follows:

The circumstances in which entities prepare financial reports on a going concern basis of accounting may vary. For example, AASB 108101 explains that those circumstances could range from when an entity has a history of profitable operations and ready access to financial resources, to when management may need to consider a wide range of factors relating to current and expected profitability, debt repayment schedules and potential sources of replacement financing before it can satisfy itself that the going concern basis is appropriate.[17]

1. Existing paragraph A5 is amended to read as follows:

The applicable financial reporting framework may or may not explicitly use the term “material uncertainty” when describing the uncertainties that are required to be disclosed in the financial report related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern. For example, the term “material uncertainty” is used in AASB 108101 and IPSAS 1. In some other financial reporting frameworks, the term “significant uncertainty” is used in similar circumstances. The auditor is required by paragraph 31 to conclude whether a material uncertainty exists regardless of whether or how the applicable financial reporting framework defines a “material uncertainty.” The applicable financial reporting framework may also not define or describe the term “may cast significant doubt” or may use other terms or phrases.

1. Existing footnote 26 in paragraph A50 is amended to read as follows:

See, for example, AASB 108101 defines this as a period that should be at least, but is not limited to, twelve months from the end of the reporting period and IPSAS 1 defines this as a period that should be at least, but is not limited to, twelve months from the approval of the financial statements.