The Government included a new chapter on decree 1074 of 2015, Reglementary of Commerce, Industry and Tourism Sector, to address the confirmation of the hypothesis of ongoing concern, asset deterioration and risk of bankruptcy.
Through this amendment was included an obligation for managers to verify the on-going concern hypothesis at the time that the financial statements of a period are being prepared. This so that, if the ongoing concern hypothesis is not fulfilled, it can be informed to the principal organ of the company in an ordinary meeting, to take the proper measures.
In addition to that, it included the obligation for the managers to track financial statements, financial information and projections of the company, in order to determine asset deterioration or risks of insolvency, so that they can be informed to the principal organ of the company to address the necessary measures.
To determine the asset deterioration or risk of bankruptcy, managers should use the following benchmarks:
BENCHMARK |
DIMENSION |
FORMULA |
|---|---|---|
| Posición patrimonial negativa | Asset detriment | Total Assets < $0 |
| Consecutive losses in two or more periods, or various periods according to the business model | Asset detriment | (Result of the period <$0) y (Result of previous period <$0) |
| Net capital over short term debt (<0,5) | Risk of bankruptcy | (Commercial accounts receivable to clients + current inventory – commercial accounts payable) / current liabilities |
| UAII / Total Assets < Liabilities | Risk of bankruptcy | (Profit before interests and taxes / total assets) < Total liabilities |