The going concern assumption in a reorganisation by accession

A reorganisation by accession does not mean that business activities cease, so the financial statements of the acceding organisation are prepared on a going concern basis.

The question

Under PBU 1/2008, accounting is based on the going concern assumption.

In a reorganisation by accession, the acceding organisation ceases to exist as a legal entity and is removed from the Unified State Register of Legal Entities (USRLE). This raises the question of whether the going concern assumption can be applied when its financial statements are prepared.

The answer

A reorganisation by accession does not mean that the business activities of the acceding organisation cease. Its rights and obligations pass to its legal successor, and the figures in its final financial statements are included in the successor's financial statements.

The financial statements of the acceding organisation are therefore prepared on a going concern basis.

Assets and liabilities are classified as current or non-current under the general rules of Federal Accounting Standard FSBU 4/2023, based on their realisation and settlement periods, the normal operating cycle and the settlement terms of the liabilities.