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Explain why, with reference to the fundamental qualitative characteristics in the Conceptual Framework , revenue information disclosed in the interim financial statements is relevant. Sky
- Explain why, with reference to the fundamental qualitative characteristics in the Conceptual Framework, revenue information disclosed in the interim financial statements is relevant.
- Sky Limited is a travel agent. The competition in the industry is keen, and many entities have failed and closed down in recent years. After having net losses in the past few years, Sky Limited reported net losses of HK$8 million for the year ended 31 August 2022. Its current assets and current liabilities as of 31 August 2022 were HK$16 million and HK$22 million respectively. Sky Limited breached the loan covenants relating to the borrowings from two financial institutions and was considering selling its key assets to repay the loans. State what assumption in the Conceptual Framework may not hold when preparing Sky Limiteds financial statements for the current year ended 31 August 2022. Explain your answer.
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