Following on from our recent blog post on Ralls Builders Limited
(in liquidation) [2016] EWHC 243 (Ch), in which Mr Justice Snowdon
discussed the issues around wrongful trading under section 214 of
the Insolvency Act 1986 and the quantum of liability that may be
placed on directors who continue to trade when they knew, or ought
to have known, that the company was insolvent, the Financial
Reporting Council ("FRC") has issued new guidance on the
going concern basis of accounting and reporting on solvency and
liquidity risks.
This new guidance, issued on 18 April 2016, replaces the
FRC's 'Going Concern and Liquidity Risk: Guidance for
Directors of UK Companies 2009' and 'An Update for
Directors of Companies that Adopt the Financial Reporting Standard
for Smaller Entities (FRSSE): Going Concern and Financial
Reporting.'
