1.12 The audited going concern note says the assessment ran only to the end of [date], while the Strategic Report says [date]
UK Company B · a UK-listed technology and logistics group · Presentation point
In brief
Note 1.5 to the consolidated financial statements says the Directors assessed going concern for [wording masked] [date]. [wording masked] in the Strategic Report say the period runs to the end of [date]. The report was approved on [date], so the date in the note would leave only about 3 months after approval, against the note's own claim of not less than 12 months from the date of the report. The date appears to be carried forward unchanged from the 2024 note.
The evidence, as filed
Screenshot withheld to protect the company’s identity: Annual Report 2025, page 194; Annual Report 2024, page 175; Annual Report 2025, page 95; Annual Report 2025, page 168. Their wording or layout could lead back to the company even with names and figures masked; the evidence list below records what each page shows.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows Going concern note: assessed '[wording masked] [date]'; same paragraph: 'not less than 12 months [wording masked]'. Strategic Report: '[wording masked] [date]'. Report approved [date]. | What the rule requires Note 1.5 states the period actually assessed, to the end of [date], matching [wording masked] and covering at least twelve months from the end of the reporting period and from approval. |
The rule
IAS 1 Presentation of Financial Statements, paragraph 26
Version relied on: UK-adopted international accounting standards (UK Endorsement Board), as in force for financial years beginning in or after January 2025
In assessing going concern, management considers all available information about the future, covering at least twelve months from the year end.
Why it applies here: the note's date is the 2024 wording carried forward.
Why it matters
A reader of the audited notes sees a going concern assessment that, as printed, runs for less than the minimum period IAS 1 requires and contradicts the Strategic Report. Going concern is an area the FRC Corporate Reporting Review team reads closely; an inconsistency of this kind typically draws an enquiry letter and an undertaking to correct it in the next report.
Exposure
No fine. Possible FRC Corporate Reporting Review enquiry and an undertaking to correct the wording in the next Annual Report.
Our workings
the audited Note 1.5 states the going concern assessment covered [wording masked] [date] and, in the same sentence, that the Group can continue for a period of not less than 12 months from the date of the report. [wording masked] state the assessment covered [wording masked] [date]. The Directors' Report was approved on [date]. The 2024 note (Annual Report 2024) also said end of [date], which was right for that year.
from the balance sheet date of [date] to [date] is 182 days (about 6 months); from approval on [date] it is 94 days (about 3 months). The [date] date gives 18 months from the balance sheet date.
As printed, the audited note describes an assessment shorter than the minimum IAS 1 paragraph 26 sets (at least twelve months from the end of the reporting period) and shorter than the 12 months from approval it claims in the same sentence, while the Strategic Report describes a compliant period. The two statements cannot both be right; the Strategic Report version is consistent with the Audit Committee's review and the auditor's going concern conclusion, so the substance is very likely sound and the defect is in the note's wording.
| Measure | Computation | Result |
|---|---|---|
| Balance sheet date ([date]) to end of [date] | [n] + [n] + [n] + [n] + [n] + [n] = 182 days (Dec, Jan, Feb, Mar, Apr, May) | 182 days, about 6 months |
| Approval ([date]) to end of [date] | 2 + [n] + [n] + [n] = 94 days | 94 days, about 3 months |
| Balance sheet date to end of [date] (Strategic Report period) | 6 + [n] = 18 months (Dec-2025 to May-2026, then Jun-2026 to May-2027) | 18 months |
Management’s best defence, and our reply
Management would say this is an obvious typographical slip: the same paragraph states a period of not less than 12 months from the date of the report, the Strategic Report gives the correct [date] date, and the auditor concluded on going concern over at least twelve months from authorisation. No figure in the accounts is affected and no reader would change a decision. The answer: the slip sits in the audited note on the basis of preparation, the one place a reader goes to see the period over which the Directors tested going concern, and as printed it describes a period shorter than IAS 1 paragraph 26 allows; the correction is simple but it should be made.
The fix
- Amend Note 1.5 to read: '[wording masked] [date] ...', and add a roll-forward check of all dates in the going concern note to the year-end close checklist.
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | The audited Note 1.5 states the assessment period ends in [date] | Document | Annual Report 2025, page 194 |
| 2 | The same sentence claims a period of at least 12 months from the date of the report | Document | Annual Report 2025, page 194 |
| 3 | [wording masked] give the period as ending in [date] | Document | Annual Report 2025, page 95 |
| 4 | The Directors' Report was approved on [date], the date of the report | Document | Annual Report 2025, page 168 |
Prepared by Pramanex from the company’s published annual reports, without the company’s involvement, to show how an annual report review reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other assurance engagement, and not legal advice. A regulator-style question is a question, not a conclusion.
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