FASB ASU 2014-15 – Management’s Responsibility To Evaluate Going Concern, And Possible Disclosure Under GAAP

David W. Tate, Esq., San Francisco and California – dave@tateattorney.com

In light of COVID-19 and shutdowns you might have been seeing recent discussions about possible business or entity going concern issues (that is, if there is substantial doubt whether they will be remaining as a viable entity within the requisite period of time) and the auditor’s responsibilities relating to those issues. Indeed, I have written blog posts on this issue.

I am passing this along for additional information, i.e., this post is not a full discussion or really even a partial discussion, FASB ASU (Accounting Standards Update) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, provides that under Generally Accepted Accounting Principles (GAAP) management itself also has a responsibility to evaluate whether there is a going concern issue and to make a disclosure if the requisite criteria are met. Now, I readily acknowledge that I will need to read up on ASU 2014-15, but in this time of COVID-19 and shutdowns and other limitations it does seem that management’s evaluation of a possible going concern issue under GAAP might (or might not) become relevant in a variety of situations which might also have legal ramifications (and, by the way, needing to read up on an issue is not uncommon for attorneys, and I am comfortable acknowledging that when appropriate – ASU 2014-15 is 39 pages and has many nuances to it). ASU 2014-15 provides that the amendments in that Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter, although early application is permitted.

For your information and reading, here is a link to ASU 2014-15: https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176164329772&acceptedDisclaimer=true

Best to you, Dave Tate, Esq. (San Francisco and California) – dave@tateattorney.com


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Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the Chair of the Business Law Section of the Bar Association of San Francisco.


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