Can FASB please get rid of the term "going concern" and replace it with something more understandable? It has caused a lot of confusion for many companies and there's no need for it whatsoever. They can completely replace the term with something else like "Continuing Operations". It's really fucking easy, I don't know why they insist on that backwards terminology except maybe they enjoy the confusion it creates.
> As of the date of issuance of these financial statements, Kodak has debt coming due within twelve months and does not have committed financing or available liquidity to meet such debt obligations if they were to become due in accordance with their current terms. These conditions raise substantial doubt about Kodak’s ability to continue as a going concern.
I'm not sure using more modern language would have cleared up any confusion here. "These conditions raise substantial doubt about Kodak’s ability to continue operations" is no less scary.
The "confusion" (according to Kodak) arises from the fact that the accountants did not consider (or considered and then discounted) the fact that Kodak apparently intends to put in place financing to help it repay or roll over its debts before they fall due. I'm not an accountant but I'm sure there are many rules around what they can and cannot consider before including such a statement.
Clearly, reporting that Kodak is about to go bankrupt simply based on that statement is jumping the gun. But I'm not sure there is anything particularly wrong with the statement itself. It seems to me like a credit crunch or even a spike in interest rates could derail Kodak's refinancing plans and what would happen then?
> The "confusion" (according to Kodak) arises from the fact that the accountants did not consider (or considered and then discounted) the fact that Kodak apparently intends to put in place financing to help it repay or roll over its debts before they fall due. I'm not an accountant but I'm sure there are many rules around what they can and cannot consider before including such a statement.
Well, from the statement itself, such financing would need to be committed, which likely they haven't done. This might be strategic, if it allows them to wind down their pension obligations and harvest the surplus investments.
This is like telling software people to stop using words like "bug" or "patch". It would be silly. Those terms are firmly ensconced in the vocabulary of the people who use them and everyone who needs to know what they mean do know what they mean.
It's not "really easy". This is a technical term used the world over to convey a very specific meaning. Bankruptcy laws define and use the term. Contracts define and use the term, etc, etc.
Jargon arises out of need and is carried on because it becomes embedded in the scaffolding of a discipline. It's not about feeling special as part of the in group or something like that.
Qualified opinion. Definition: An auditor's report that indicates the financial statements are presented fairly, in all material respects, except for the effects of a specific departure from generally accepted accounting principles (GAAP) or a limitation in the scope of the audit.
People love their ingroup terminology and quirks. Like that a power cable connecting the RV is a shoreline (eyeroll) and that ships are female (double eyeroll).
