CERTYNEX IFRS ACADEMY

Vrascade's only plant, uninsured, is destroyed by fire in February. Lacking the means to rebuild it, management concludes before authorisation that it has no realistic alternative but to cease trading. The accountant proposes simple disclosure of the fire. What is the answer?

Disclosure is enough, the fire being a non-adjusting event.

The going concern basis is ruled out: the accounts change basis, beyond a disclosure.

One must wait for the fire assessment before concluding on going concern.

The plant should simply be written down at 31 December, keeping the going concern basis.