U.S. companies would have to regularly assess their ability to continue as a going concern under a proposal issued yesterday by accounting rule-makers, an attempt to ensure investors get timelier warnings when companies get in trouble, Reuters reported yesterday. The proposal from the U.S. Financial Accounting Standards Board calls for companies to evaluate each quarter their ability to survive as a going concern, or stay afloat and pay its obligations. Currently, the company's auditors are primarily responsible for making this evaluation. Under the proposal, the company would have to issue its own warnings to investors when it is more likely than not that it would fail to meet its obligations over the next 12 months. Auditors would still be responsible for evaluating the company's going concern assessments. FASB is seeking comment on the proposal through September 24. It did not give an estimate for an effective date.
