FRC flags disclosure gaps in viability statements

Viability and going concern reporting need to be improved to give investors and key stakeholders a clearer picture of the financial stability of businesses, warns the Financial Reporting Council (FRC)

The findings of the latest FRC review of companies’ viability and going concern disclosures are not transparent enough with some companies falling back on a boilerplate approach without any detailed substantiation of disclosures.

Clear and comprehensive disclosures on these matters are particularly important given the backdrop of the Covid-19 pandemic which caused greater uncertainty for some companies, the FRC stressed. Uncertainties that impact viability or going concern should be clearly explained to stakeholders.

In particular, the review found that:

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