# ASC 205-40: Presentation of Financial Statements — Going Concern Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/205/40/) 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): 2026-09-09T22:54:09.829Z to 2026-09-09T22:54:28.693Z Record version: sha256:0d6bad2d386b9a42536744e6c2e1d1c89a521bc427cbf22f783c7256e60e2a01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40: Presentation of Financial Statements — Going Concern ### Machine-generated study aids ```json { "summary": "ASC 205-40 requires management of every entity, in connection with preparing annual and interim financial statements, to evaluate whether conditions and events considered in the aggregate raise substantial doubt about the entity's ability to continue as a going concern within one year after the date the financial statements are issued (or are available to be issued). Substantial doubt exists when it is probable the entity will be unable to meet its obligations as they become due in that lookforward period, assessed initially without regard to unimplemented management plans. Depending on whether management's plans alleviate that doubt, prescribed note disclosures — including an express \"substantial doubt\" statement when doubt is not alleviated — are required.", "key_points": [ "The going concern basis of accounting is presumed unless and until liquidation becomes imminent, at which point the liquidation basis under Subtopic 205-30 applies (205-40-05-1).", "Management must perform the going concern evaluation each annual and interim reporting period, using a one-year-after-issuance lookforward period and conditions known and reasonably knowable at the issuance date (205-40-50-1; 205-40-50-3).", "Substantial doubt exists when relevant conditions and events, in the aggregate, indicate it is probable the entity will be unable to meet its obligations as they become due within one year after issuance; the initial evaluation excludes the mitigating effect of plans not fully implemented (205-40-50-4).", "Management's plans may be considered in alleviating substantial doubt only if it is probable both that the plans will be effectively implemented and that, when implemented, they will mitigate the relevant conditions or events (205-40-50-7); approval of the plan before the issuance date is generally required (205-40-50-8).", "A plan to meet obligations through liquidation cannot be considered in evaluating whether substantial doubt is alleviated, even if liquidation is probable (205-40-50-11).", "If plans alleviate substantial doubt, disclose the principal conditions or events, management's evaluation of their significance, and the plans that alleviated the doubt (205-40-50-12); if doubt is not alleviated, additionally include an explicit statement that substantial doubt exists (205-40-50-13).", "Disclosures continue and become more extensive in subsequent periods, with context and continuity, and in the period substantial doubt no longer exists the entity discloses how the conditions or events were resolved (205-40-50-14)." ], "categories": [ "Disclosure", "Presentation", "Financial statement presentation" ], "audience_level": "introductory", "student_note": "Exam favorite: the assessment window runs one year from the date the financial statements are ISSUED (not the balance sheet date), and the threshold is \"probable,\" not \"reasonably possible.\" The most common mistake is netting management's unimplemented rescue plans into the initial assessment — plans are considered only in the second step, and only if both implementation and mitigation are probable.", "related_topics": [ "205-30", "270-10", "855", "450-20" ], "key_concepts": [ "going concern basis of accounting", "substantial doubt", "one year after issuance date", "probable", "management's plans", "known and reasonably knowable", "liquidation basis of accounting", "note disclosure" ] } ``` Source downloaded (UTC): 2026-09-09T22:54:09.829Z to 2026-09-09T22:54:09.829Z Record version: sha256:b5193c16b48ebb9ac8b017c6cebde1216197fbd01e6ae0a3be5a7fe969247ae5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/205/40/#00-status) SEC content: no ##### [205-40-00-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-00-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:09.829Z to 2026-09-09T22:54:09.829Z Record version: sha256:12a2083f91e474572cb68521658426f78d237fdf44c4f0808e4e58f2ebafd8c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Financial Statements Are Available to Be IssuedAddedAccounting Standards Update No. 2014-1508/27/2014
Financial Statements Are IssuedAddedAccounting Standards Update No. 2014-1508/27/2014
LiquidationAddedAccounting Standards Update No. 2014-1508/27/2014
Probable (2nd def)AddedAccounting Standards Update No. 2014-1508/27/2014
Substantial Doubt about an Entity's Ability to Continue as a Going ConcernAddedAccounting Standards Update No. 2014-1508/27/2014
205-40-05-1 through 05-3
AddedAccounting Standards Update No. 2014-1508/27/2014
205-40-05-3AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-40-15-1AddedAccounting Standards Update No. 2014-1508/27/2014
205-40-50-1 through 50-14
AddedAccounting Standards Update No. 2014-1508/27/2014
205-40-50-12 through 50-14
AmendedAccounting Standards Update No. 2025-1112/08/2025
205-40-50-12AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-40-50-13AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-40-55-1AmendedMaintenance Update 2016-11 (PDF)06/27/2016
205-40-55-1 through 55-3
AddedAccounting Standards Update No. 2014-1508/27/2014
205-40-55-3AddedAccounting Standards Update No. 2016-0202/25/2016
205-40-65-1AddedAccounting Standards Update No. 2014-1508/27/2014
Source downloaded (UTC): 2026-09-09T22:54:11.724Z to 2026-09-09T22:54:11.724Z Record version: sha256:441eb68fbcb4a60340590413af8ab96fdc05039784a4db2ba8c7a8b2b5d05c5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/205/40/#05-overview-and-background) SEC content: no ##### [205-40-05-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-05-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:11.724Z to 2026-09-09T22:54:11.724Z Record version: sha256:0119c7c64ee45b3df79a5199fa8d20127ef93b217b0efa4fa5d0db23a91d4f14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Continuation of an entity as a going concern is presumed as the basis for financial reporting unless and until the entity's [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.") becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements are prepared under the liquidation basis of accounting in accordance with Subtopic 205-30 on the liquidation basis of accounting. ##### [205-40-05-2](https://asc.understandingaccounting.org/asc/205/40/#205-40-05-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:11.724Z to 2026-09-09T22:54:11.724Z Record version: sha256:bd71d58be5f909ec8f526281056579a56ddba5b28be7c224864807bd36303e04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Even if an entity's liquidation is not imminent, there may be conditions and events, considered in the aggregate, that 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."). In those situations, financial statements continue to be prepared under the going concern basis of accounting, but the guidance in this Subtopic should be followed to determine whether to disclose information about the relevant conditions or events. ##### [205-40-05-3](https://asc.understandingaccounting.org/asc/205/40/#205-40-05-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:11.724Z to 2026-09-09T22:54:11.724Z Record version: sha256:c2b0054cb276974f613973122549f611e862fb31f11277eabbe7717ed3d2c4c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for evaluating whether there is substantial doubt about an entity's ability to continue as a going concern and about related note disclosures. Source downloaded (UTC): 2026-09-09T22:54:15.563Z to 2026-09-09T22:54:15.563Z Record version: sha256:a6da67a1bd9315d86cfe8d56a5a46080f00271a35597ca8078aa6b6eb009b62f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/205/40/#15-scope-and-scope-exceptions) SEC content: no #### Entities ##### [205-40-15-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-15-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:15.563Z to 2026-09-09T22:54:15.563Z Record version: sha256:4bcf40b6299061bce9f6893ace641ac19516a806fbb0e778614d1dd7290d77f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all entities. 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. Source downloaded (UTC): 2026-09-09T22:54:23.248Z to 2026-09-09T22:54:23.248Z Record version: sha256:8814a193fe23fec38656795482cf9733d40327c2d4aa04106329f765a80adc2d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/205/40/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [205-40-55-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:23.248Z to 2026-09-09T22:54:23.248Z Record version: sha256:01f53bb76554b706ec70a1cce85c93a34b752f5bb633c570139ce1c49c458ccb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following flowchart depicts the decision process to follow for evaluating whether there is substantial doubt about an entity's ability to continue as a going concern and determining related disclosure requirements. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-03959127-76AB-449E-B631-B983D521E9C3-low.gif) No "Are the criteria met for the liquidation basis of accounting? (Subtopic 205-30)" "Are there conditions or events, considered in the aggregate, that raise substantial doubt about an entity's ability to continue as a going concern within one year after the date the financial statements are issued (or available to be issued)? (paragraphs 205-40-50-01 through 50-5)" "An entity shall disclose information to help users understand the following when substantial doubt is alleviated by management's plans: 1. Principal conditions or events that raised substantial doubt, before consideration of management's plans 2. Management's evaluation of the significance of those conditions or events 3. Management's plans that alleviated substantial doubt. (paragraph 205-40-50-12)" Apply the liquidation basis of accounting. (Subtopic 205-30) "No disclosures are required specific to going concern uncertainties under Subtopic 205-40. See Topics 275 and 450 for other disclosures about risks, uncertainties, and contingencies, as applicable." "Is it probable that management's plans will be effectively implemented? (paragraphs 205-40-50-7 through 50-8)" Yes No No Yes Yes Start "An entity shall disclose information to help users understand the following when substantial doubt is not alleviated: 1. Principal conditions or events that raise substantial doubt 2. Management's evaluation of the significance of those conditions or events 3. Management's plans that are intended to mitigate the conditions or events that raise substantial doubt. The entity also should include in the footnotes a statement 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 (or available to be issued). (paragraph 205-40-50-13)" No "Consider management's plans intended to mitigate the adverse conditions or events. (paragraphs 205-40-50-6 through 50-11)" "Is it probable that management's plans will mitigate the relevant conditions or events that raise substantial doubt? (paragraph 205-40-50-10)" Yes ##### [205-40-55-2](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:23.248Z to 2026-09-09T22:54:23.248Z Record version: sha256:ab24eb4a3d0d349922ab31ac84f328e52ab94153dbe845f580d4e172f5e4ae6f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of adverse conditions and events that may 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."). The examples are not all-inclusive. The existence of one or more of these conditions or events does not determine that there is substantial doubt about an entity's ability to continue as a going concern. Similarly, the absence of those conditions or events does not determine that there is no substantial doubt about an entity's ability to continue as a going concern. Determining whether there is substantial doubt depends on an assessment of relevant conditions and events, in the aggregate, that are known and reasonably knowable at 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 at the date 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). An entity should weigh the likelihood and magnitude of the potential effects of the relevant conditions and events, and consider their anticipated timing. 1. a Negative financial trends, for example, recurring operating losses, working capital deficiencies, negative cash flows from operating activities, and other adverse key financial ratios 2. b Other indications of possible financial difficulties, for example, default on loans or similar agreements, arrearages in dividends, denial of usual trade credit from suppliers, a need to restructure debt to avoid default, noncompliance with statutory capital requirements, and a need to seek new sources or methods of financing or to dispose of substantial assets 3. c Internal matters, for example, work stoppages or other labor difficulties, substantial dependence on the success of a particular project, uneconomic long-term commitments, and a need to significantly revise operations 4. d External matters, for example, legal proceedings, legislation, or similar matters that might jeopardize the entity's ability to operate; loss of a key franchise, license, or patent; loss of a principal customer or supplier; and an uninsured or underinsured catastrophe such as a hurricane, tornado, earthquake, or flood. ##### [205-40-55-3](https://asc.understandingaccounting.org/asc/205/40/#205-40-55-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:23.248Z to 2026-09-09T22:54:23.248Z Record version: sha256:0d62a809111bc451f85767c777d9426c631f8f79de5721054260b53e5f556eef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of plans that management may implement to mitigate conditions or events that raise substantial doubt about an entity's ability to continue as a going concern. The examples are not all-inclusive. Below each example is a list of the types of information that management should consider at the date that the financial statements are issued in evaluating the feasibility of the plans to determine whether it is [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") that the plan will be effectively implemented within one year after the date that the financial statements are issued. 1. a Plans to dispose of an asset or business: 1. 1 Restrictions on disposal of an asset or business, such as covenants that limit those transactions in loan or similar agreements, or encumbrances against the asset or business 2. 2 Marketability of the asset or business that management plans to sell 3. 3 Possible direct or indirect effects of disposal of the asset or business 2. b Plans to borrow money or restructure debt: 1. 1 Availability and terms of new debt financing, or availability and terms of existing debt refinancing, such as term debt, lines of credit, or arrangements for factoring receivables or sale and leaseback of assets 2. 2 Existing or committed arrangements to restructure or subordinate debt or to guarantee loans to the entity 3. 3 Possible effects on management's borrowing plans of existing restrictions on additional borrowing or the sufficiency of available collateral 3. c Plans to reduce or delay expenditures: 1. 1 Feasibility of plans to reduce overhead or administrative expenditures, to postpone maintenance or research and development projects, or to lease rather than purchase assets 2. 2 Possible direct or indirect effects on the entity and its cash flows of reduced or delayed expenditures 4. d Plans to increase ownership equity: 1. 1 Feasibility of plans to increase ownership equity, including existing or committed arrangements to raise additional capital 2. 2 Existing or committed arrangements to reduce current dividend requirements or to accelerate cash infusions from affiliates or other investors. Source downloaded (UTC): 2026-09-09T22:54:26.646Z to 2026-09-09T22:54:26.646Z Record version: sha256:471eda4e65abcf85fd095283b0615a0048e7db8d260abbc675347495b2c03894 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 205-40-65: 65 Transition Date and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/205/40/#65-transition-date-and-open-effective-date-information) SEC content: no ##### [205-40-65-1](https://asc.understandingaccounting.org/asc/205/40/#205-40-65-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:54:26.646Z to 2026-09-09T22:54:26.646Z Record version: sha256:7ce0ccf58dc0d9e1a4cd2ad3705eef155b7b12cc78063f282404007c6d574720 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 06/20/2018 after the end of the transition period stated in Accounting Standards Update No. 2014-15, _Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern_.