Which of the following would not be considered an “other factor” when management is evaluating whether there is a substantial doubt as to whether the entity will be able to continue as a going concern within one year after the financial statements are issued?
A. investing $5m in new plant and machinery using an overdraft.
B. labor difficulties due to an increase minimum wage.
C. delayed payments to suppliers with some suppliers withdrawing credit and insisting on cash on delivery, which further impacts the overdrawn balance at the bank
D. cash flow forecast showing a significantly worsening position within the next 24 months.
Answer:D
Which of the following would not be considered an “other factor” when management is evaluating whether there is a substantial doubt as to whether the entity will be able to continue as a going concern within one year after the financial statements are issued?
A. investing $5m in new plant and machinery using an overdraft. B. labor difficulties due to an increase minimum wage. C. delayed payments to suppliers with some suppliers withdrawing credit and insisting on cash on delivery, which further impacts the overdrawn balance at the bank D. cash flow forecast showing a significantly worsening position within the next 24 months.