AASB Conceptual Framework for Financial Reporting (May 2019) 3.9: Going concern and the reporting entity

What does 3.9 require?

Financial statements assume the entity is a going concern that will keep operating for the foreseeable future, unless it intends or needs to liquidate or cease trading, in which case a different basis may be needed and must be described. A reporting entity is whatever entity must, or decides to, prepare financial statements; it need not be a legal entity and can be a portion of an entity or more than one entity. Where one entity controls another, consolidated financial statements for the group generally provide more useful information than unconsolidated statements, and unconsolidated statements cannot substitute for consolidated ones; combined statements may suit entities without a parent-subsidiary relationship. Determining the boundary of a reporting entity that is not a legal entity turns on what the primary users need to know.