Going concern
(a) On Dec 31, 01, it is intended to liquidate entity in A in 18 months. Nevertheless, A intends to prepare its financial statements on a going concern basis because IAS 1.26 mentions a period of 12 months from the end of the reporting period as a reference point.
(b) With regard to entity B”s financial statements as at Dec 31, 01, there is significant doubt about B”s ability to continue as a going concern. Nevertheless, B intends to prepare its financial statements on a going concern basis.
Required
Assess whether it is appropriate to prepare A”s and B”s financial statements as at Dec 31, 01 on a going concern basis.