December 5, 2016
Changing Going Concern Environment – New Disclosures for Insurance Entities
Under accounting standards generally accepted in the United States (GAAP), financial statements are prepared under what is commonly referred to as the going concern basis of accounting. This basis of accounting presumes the continuation of an entity unless an entity’s liquidation becomes imminent. However, well before liquidation becomes imminent, conditions or events may exist that raise substantial doubts about an entity’s ability to continue as a going concern. When such conditions arise, management was not required to make disclosures in the financial statements as GAAP were silent on management’s responsibility to assess, and potentially disclose, conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern. But, with the issuance of Accounting Standards Update (ASU) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, that changes.
Download a detailed overview of the changes and how it may impact your organization.