SME guidance on going concern published by ICAS and ICAEW

May 19, 2020

ICAS and ICAEW have today jointly published free-to-access guidance for owners and directors of SMEs to assess the prospects of their business in the wake of COVID-19.

The guidance has been written by experts at ICAS and ICAEW to aid the many small and medium-sized businesses that have been affected by the coronavirus crisis as they prepare their accounts.

Company directors are required each year to assess whether the business is a going concern when drawing up their annual accounts, and this should cover at least the 12 months from the date the accounts are to be approved by the directors. But coronavirus has had a dramatic change on the performance and prospects of many businesses, leaving some under threat, and accounts will have to reflect its impact.

The publication explains to business owners and directors the importance of forecasting cash flow and how to reflect the impact of COVID-19. Additionally, it provides suggestions on how to work with auditors and accountants during the pandemic, including the need to provide evidence which shows that conclusions reached regarding going concern are reasonable.

The guide is available here.