New Guidance published on the Going Concern Basis of Accounting and Related Reporting

On 25 February 2025 the Financial Reporting Council (“FRC”) published its revised Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks).

This non-mandatory guidance replaces the previous version published in 2016 (which is now withdrawn) and aims to bring together the latest requirements of company law, accounting and auditing standards, the UK Listing Rules, the UK Corporate Governance Code and other relevant regulations. It applies to all UK companies, except for small companies and micro-entities, and is intended to be “a proportionate and practical guide for directors” as they review the requirements to:

1. assess and make disclosures related to the going concern basis of accounting and any material uncertainties in their financial statements; and 
2. disclose the principal risks and uncertainties within their business, which may include risks that might impact solvency and liquidity, within their strategic report.

To accompany the publication of the Guidance, the FRC have helpfully published an Explainer: Guidance on the Going Concern Basis of Accounting and Related Reporting providing a brief overview of the Guidance as well as a podcast, In Conversation: Updating the FRC's going concern guidance, featuring Kate O’Neill, Director of Stakeholder Engagement and Corporate Affairs, and Jenny Carter, Director of Accounting and Reporting Policy.

If you would like to discuss any of the points raised in the revised Guidance, please speak to your Burges Salmon contact, Nick Graves (Head of the Corporate Department), AJ Venter or Charlotte Hamilton.