Question to the Department for Business and Trade:

To ask His Majesty's Government what legal advice, if any, the Financial Reporting Council took in producing Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks), published on 25 February; and, if so, which entity gave them such advice.

The Financial Reporting Council (FPR) 'Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity Risks)' (the guidance) is non-mandatory and non-statutory guidance issued by the FRC to support its public interest outcomes. The guidance was not developed to address matters relating to distributable profits.

Section 393 of the Companies Act 2006 is referenced in the guidance as one of the relevant requirements. Accounting standards set the threshold for departing from the going concern basis of accounting. As noted in paragraph 3.3 of the guidance, there are often realistic alternatives to liquidation or cessation of operations.