In January 2013, the FRC consulted on how best to implement Lord Sharman's proposals on going concern. The FRC was pleased that the majority of respondents supported the principles behind the recommendations advocated by Lord Sharman’s report, “Going Concern and Liquidity Risks: Lessons For Companies and Auditors”.

In terms of the development of guidance in support of the principles, the FRC has decided to take up a number of proposals and will:

• Issue separate, simplified guidance for SMEs as the feed back showed that the recommendations for SMEs could be more proportionate
• Distinguish more clearly between the specific assessment required when preparing the financial statements and the broader assessment of the risks affecting a company’s viability both of which where referred to as "going concern". The FRC will also consult on whether changes to the UK Corporate Governance Code are needed to make the distinction clearer
• Link the assessment of business viability risks and the broader risk assessment that should form part of a company’s normal risk management and reporting processes more clearly.

Please click for the following information on the FRC website:

• Sharman Implementation Consultation Paper
• Responses to Sharman Implementation
• FRC press release announcing the lessons drawn