FASB has revised its calendar for Wednesday's (Jan. 11, 2012) board meeting, to add a disussion of the meaning of 'substantial doubt' to remain a Going Concern, part of its project on Disclosures About Risks and Uncertainties and the Liquidation Basis of Accounting (formerly referred to as FASB's 'Going Concern' project
, and in my view, potentially to once again become a subproject, if not a project, entitled 'Going Concern.').
A continuing point of contention, also set for discussion at Wednesday's board meeting, is whether to shift the primary responsibility for the going concern decision/disclosure to management - from the auditors - as proposed in FASB's 2008 Exposure Draft, Going Concern
. As noted in the 2008 ED, FASB would need to coordinate such a change in responsibilities and related rulemaking with the AICPA's Auditing Standards Board (as pertains to audits of private companies) and the Public Company Accounting Oversight Board (as pertains to audits of public companies). To date, the PCAOB has not issued its own separate standard on Going Concern, but adopted the AICPA's existing Going Concern standard among the suite of existing AICPA standards - referred to as the PCAOB's 'interim standards' - adopted by the PCAOB upon its formation following the Sarbanes-Oxley Act.)
As noted in the minutes of FASB's Oct. 26, 2011 board meeting,
"The Board postponed making a decision about whether the management of an entity, as opposed to its outside accountants, should have primary responsibility for generating the going-concern assessment. Instead, the Board instructed the staff to perform additional work to determine whether the term substantial doubt can be defined in a way that would be operable and not conflict with auditing guidance to be developed by the Public Company Accounting Oversight Board and the Auditing Standards Board of the American Institute of Certified Public Accountants." The results of the FASB staff's outreach will take place tomorrow.
FASB's discussion on Wednesday about Disclosures About Risks and Uncertainties,
including Going Concern
, takes the place of FASB's previously scheduled discussion on Accounting for Financial Instruments: Classification and Measurement.