# ASC 205-40-50: Presentation of Financial Statements — Going Concern — 50 Disclosure Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/205/40/#50-disclosure) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:da932bcb4bbc3d155c29e54d5230897d67a8dee37c4d4af67412c366bca73772 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/205/40/#50-disclosure) SEC content: no #### Evaluating Conditions and Events That May Raise Substantial Doubt ##### [205-40-50-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:f43347fe5b090a769ba2d080f5693fb76644db7b876a557a09b9aef7e5226385 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In connection with preparing financial statements for each annual and interim reporting period, an entity's management shall evaluate whether there are conditions and events, considered in the aggregate, that raise [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") within one year after the date that the [financial statements are issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-issued "Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that complies with GAAP. (U.S. Securities and Exchange Commission [SEC] registrants also are required to consider the guidance in paragraph 855-10-S99-2.)") (or within one year after the date that the [financial statements are available to be issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-available-to-be-issued "Financial statements are considered available to be issued when they are complete in a form and format that complies with GAAP and all approvals necessary for issuance have been obtained, for example, from management, the board of directors, and/or significant shareholders. The process involved in creating and distributing the financial statements will vary depending on an entity's management and corporate governance structure as well as statutory and regulatory requirements.") when applicable). ##### [205-40-50-2](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:1c6dc7255065e5df922c5dbb689723bc9eedcf42b7cd1b667694ec2e89a312e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Ordinarily, conditions or events that raise substantial doubt about an entity's ability to continue as a going concern relate to the entity's ability to meet its obligations as they become due. Accordingly, management's evaluation of an entity's ability to continue as a going concern ordinarily is based on conditions and events that are relevant to an entity's ability to meet its obligations as they become due within one year after the date that the financial statements are issued. ##### [205-40-50-3](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:9178cafbd827399ba89679ab9df69d4ef3b98aee4aa45e0026e1fcb8ebf8bfc7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management's evaluation shall be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. ##### [205-40-50-4](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:5520e5d7b39df8b70ee6caef038bc114144f045704e313d3be801ce2c1c4efd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Management shall evaluate whether relevant conditions and events, considered in the aggregate, indicate that it is probable that an entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The evaluation initially shall not take into consideration the potential mitigating effect of management's plans that have not been fully implemented as of the date that the financial statements are issued (for example, plans to raise capital, borrow money, restructure debt, or dispose of an asset that have been approved but that have not been fully implemented as of the date that the financial statements are issued). ##### [205-40-50-5](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:6b297520a9bd666296dd3e200c6044d00a884eca2b00e143ec3f69de389726d7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When evaluating an entity's ability to meet its obligations, management shall consider quantitative and qualitative information about the following conditions and events, among other relevant conditions and events known and reasonably knowable at the date that the financial statements are issued: 1. a The entity's current financial condition, including its liquidity sources at the date that the financial statements are issued (for example, available liquid funds and available access to credit) 2. b The entity's conditional and unconditional obligations due or anticipated within one year after the date that the financial statements are issued (regardless of whether those obligations are recognized in the entity's financial statements) 3. c The funds necessary to maintain the entity's operations considering its current financial condition, obligations, and other expected cash flows within one year after the date that the financial statements are issued 4. d The other conditions and events, when considered in conjunction with (a), (b), and (c) above, that may adversely affect the entity's ability to meet its obligations within one year after the date that the financial statements are issued. See paragraph [205-40-55-2](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-2) for examples of those conditions and events. #### Consideration of Management's Plans When Substantial Doubt Is Raised ##### [205-40-50-6](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:0d59e60218e6e2d6478705ca1101d48355cc02f62903247555870272c5a4aa79 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When relevant conditions or events, considered in the aggregate, initially indicate that it is [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") that an entity will be unable to meet its obligations as they become due within one year after the date that the [financial statements are issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-issued "Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that complies with GAAP. (U.S. Securities and Exchange Commission [SEC] registrants also are required to consider the guidance in paragraph 855-10-S99-2.)") (and therefore they raise [substantial doubt about the entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.")), management shall evaluate whether its plans that are intended to mitigate those conditions and events, when implemented, will alleviate substantial doubt about the entity's ability to continue as a going concern. ##### [205-40-50-7](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:a451f5efef9a0151a0370ed36676145719e6ce41bc6ab5efd0c5b9be3c90012d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The mitigating effect of management's plans shall be considered in evaluating whether the substantial doubt is alleviated only to the extent that information available as of the date that the financial statements are issued indicates both of the following: 1. a It is probable that management's plans will be effectively implemented within one year after the date that the financial statements are issued. 2. b It is probable that management's plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. ##### [205-40-50-8](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:f0dd2dbe1fc8ede9783f39862e20e38ecc629108a7f1e521fe22b289dfeb252c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The evaluation of whether it is probable that management's plans will be effectively implemented within one year after the date that the financial statements are issued shall be based on the feasibility of implementation of management's plans in light of an entity's specific facts and circumstances. Generally, to be considered probable of being effectively implemented, management (or others with the appropriate authority) must have approved the plan before the date that the financial statements are issued. Paragraph [205-40-55-3](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-3) provides examples of plans that management may implement and information that management should consider for each plan in evaluating the feasibility of the plans. ##### [205-40-50-9](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:b87729fd1e74614999c19fa9b766841e47acafe62d22752f27f46def1d418425 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The mitigating effect of management's plans that are not probable of being effectively implemented within one year after the date that the financial statements are issued shall not be considered in evaluating whether substantial doubt about an entity's ability to continue as a going concern is alleviated. ##### [205-40-50-10](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:ad7c8121df7d516d4d6d4e53ffbc75f4c14d5f34ed56c53688eed775b080b697 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As required in paragraph [205-40-50-7](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-7), management shall further assess its plans that are probable of being effectively implemented to determine whether it is probable that those plans will mitigate the conditions or events that raise substantial doubt about an entity's ability to continue as a going concern. In this assessment, management shall consider the expected magnitude and timing of the mitigating effect of its plans in relation to the magnitude and timing of the relevant conditions or events that those plans intend to mitigate. ##### [205-40-50-11](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:2b3cc8089b01e21a9e6893606ffdd997bc2e47a2d93e5af5e9de7c55b04aa14e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan to meet an entity's obligations as they become due through [liquidation](https://asc.understandingaccounting.org/glossary/l/#liquidation "The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation.") (as defined in Subtopic 205-30 on the liquidation basis of accounting) shall not be considered as part of management's plans in evaluating whether substantial doubt is alleviated even if liquidation is probable of occurring. #### Disclosures When Substantial Doubt Is Raised but Is Alleviated by Management's Plans (Substantial Doubt Does Not Exist) ##### [205-40-50-12](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-12) Pending content: yes Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:f77cb692b9d0bf7cd8f0ab8868a5f8287e343d57c9d970f32298d06c52806ded Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, after considering management's plans, [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") is alleviated as a result of consideration of management's plans, an entity shall disclose in the notes to financial statements information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the notes): 1. a Principal conditions or events that raised substantial doubt about the entity's ability to continue as a going concern (before consideration of management's plans) 2. b Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations 3. c Management's plans that alleviated substantial doubt about the entity's ability to continue as a going concern. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)If, after considering management's plans, [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") is alleviated as a result of consideration of management's plans, an entity shall disclose in the notes to interim and annual financial statements information that enables users of the financial statements to understand all of the following (or refer to similar information disclosed elsewhere in the notes): 1. a Principal conditions or events that raised substantial doubt about the entity's ability to continue as a going concern (before consideration of management's plans) 2. b Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations 3. c Management's plans that alleviated substantial doubt about the entity's ability to continue as a going concern. #### Disclosures When Substantial Doubt Is Raised and Is Not Alleviated (Substantial Doubt Exists) ##### [205-40-50-13](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-13) Pending content: yes Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:5208555443918988efe863e3faf98db94a771134c906e5bb080c1e98262a6569 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, after considering management's plans, [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") is not alleviated, the entity shall include a statement in the notes to financial statements indicating that there is substantial doubt about the entity's ability to continue as a going concern within one year after the date that the [financial statements are issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-issued "Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that complies with GAAP. (U.S. Securities and Exchange Commission [SEC] registrants also are required to consider the guidance in paragraph 855-10-S99-2.)"). Additionally, the entity shall disclose information that enables users of the financial statements to understand all of the following: 1. a Principal conditions or events that raise substantial doubt about the entity's ability to continue as a going concern 2. b Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations 3. c Management's plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)If, after considering management's plans, [substantial doubt about an entity's ability to continue as a going concern](https://asc.understandingaccounting.org/glossary/s/#substantial-doubt-about-an-entity-s-ability-to-continue-as-a-going-concern "Substantial doubt about an entity's ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). The term probable is used consistently with its use in Topic 450 on contingencies.") is not alleviated, the entity shall include a statement in the notes to interim and annual financial statements indicating that there is substantial doubt about the entity's ability to continue as a going concern within one year after the date that the [financial statements are issued](https://asc.understandingaccounting.org/glossary/f/#financial-statements-are-issued "Financial statements are considered issued when they are widely distributed to shareholders and other financial statement users for general use and reliance in a form and format that complies with GAAP. (U.S. Securities and Exchange Commission [SEC] registrants also are required to consider the guidance in paragraph 855-10-S99-2.)"). Additionally, the entity shall disclose information that enables users of the financial statements to understand all of the following in interim and annual reporting periods: 1. a Principal conditions or events that raise substantial doubt about the entity's ability to continue as a going concern 2. b Management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations 3. c Management's plans that are intended to mitigate the conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. ##### [205-40-50-14](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-14) Pending content: yes Source downloaded (UTC): 2026-09-09T22:54:21.424Z to 2026-09-09T22:54:21.424Z Record version: sha256:ac3d7f0c420cce0e726c82246451a9fd8889d13927c46aaf75a852d7f0051939 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If conditions or events continue to raise substantial doubt about an entity's ability to continue as a going concern in subsequent annual or interim reporting periods, the entity shall continue to provide the required disclosures in paragraphs [205-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-12) in those subsequent periods. Disclosures should become more extensive as additional information becomes available about the relevant conditions or events and about management's plans. An entity shall provide appropriate context and continuity in explaining how conditions or events have changed between reporting periods. For the period in which substantial doubt no longer exists (before or after consideration of management's plans), an entity shall disclose how the relevant conditions or events that raised substantial doubt were resolved. Transition date:(P) December 16, 2027; (N) December 16, 2028Transition guidance: [270-10-65-1](https://asc.understandingaccounting.org/asc/270/10/#270-10-65-1)If conditions or events continue to raise substantial doubt about an entity's ability to continue as a going concern in subsequent annual or interim reporting periods, the entity shall continue to provide the required disclosures in paragraphs [205-40-50-12 through 50-13](https://asc.understandingaccounting.org/asc/205/40/#205-40-50-12) in those subsequent periods. Disclosures should become more extensive as additional information becomes available about the relevant conditions or events and about management's plans. An entity shall provide appropriate context and continuity in explaining how conditions or events have changed between reporting periods. For the period in which substantial doubt no longer exists (before or after consideration of management's plans), an entity shall disclose how the relevant conditions or events that raised substantial doubt were resolved. The disclosures in this paragraph are required in interim and annual reporting periods.