The applicable financial reporting framework in Pakistan does not prescribe financial accounting and reporting guidelines for the company that is not regarded as a going concern. In view of the diverging basis of preparation of the financial statements by the non-going concern companies and dormant companies, development of a guideline on the accounting and reporting requirements of such companies was considered necessary.
The Council in its 283rd meeting held on January 25, 2017 approved issuance of the “Guideline on basis of Preparation of Financial Statements for Companies that are not Considered Going Concern” (the Accounting Guideline) on the recommendation of the Professional Standards and Technical Advisory Committee.
The Accounting Guideline aims to assist in the preparation of statutory financial statements of the companies that are not regarded as going concern, and sets out the principle of recognition and measurement of the elements of financial statements, provides guidance on the preparation of the financial statements of dormant companies, and outlines minimum disclosure and presentation requirements.
Members are advised to take guidance from the enclosed Accounting Guideline.