The revised FRC guidance reflects issues identified during the financial crisis where the going concern basis of valuation failed to provide the requisite levels of assurance. The Viability Statement is designed to encourage risk to be considered as integral to the business rather than as a separate function and to take a strategic perspective of the risks that a business faces.
This joint CGMA report with the Chairmen's Forum, Alvarez & Marsal and Airmic provides insights to help address the challenges of the new reporting requirements in the Code while at the same time providing benefits for companies. The insights were developed from a series of fora and roundtables for chairmen and board members of FTSE100 and 250 companies.
In regulation and in risk, as in life, it is as well not only to try to learn from our experience but to anticipate the impact of the rapidly changing world in which we all work. In a Board context this requires careful thought to the increasingly complex topic of risk and to well informed and adequate discussion and debate on matters which critically affect the long term viability of the business.
Sir Win Bischoff
Chairman, Financial Reporting Council