CAF-6 · Chapter 1 · Question 12 of 15
After the reporting period but before the financial statements are authorized for issue, management decides to completely liquidate the entity. How does this decision affect the preparation of the financial statements?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The financial statements should not be prepared on a going concern basis.
Explanation
IAS 10 states that an entity should not prepare its financial statements on a going concern basis if events after the reporting period indicate that the going concern assumption is no longer appropriate.
More IAS 10, IAS 37 & IFRIC 1 MCQs
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