Corporate Insolvency Accounting and Financial Reporting for Non-Going Concerns, Delinquent and Liquidating Entities

This paper investigated accounting in non-going concerns, insolvent, liquidating entities and pattern of rendition of these financial reporting in Nigeria and another four focal countries. This research is undertaken with view to establish the existence or lack of specific accounting and financial reporting standards. Ex-post ‘facto’ analyses of accounting standards, laws and regulations guiding management of the affairs of corporate failures, insolvent enterprises, impaired concerns; voluntarily and involuntary liquidation companies were employed. Data sets were extracted from international and national accounting and auditing standards, laws, regulations and insolvency / liquidation procedures alongside financial reports of several distressed, in-liquidation and liquidating entities from five focal countries and used in analyses. These materials were statistically tested using simple numerical analysis, descriptive statistics with mean absolute percentage error or calculate-expected value difference. Result show that there is no such standards unified insolvency accounting standards in global practice; that going concerns’ assumption with use of net book value basis is commonly used by financially distressed entities. The use of net realised values is applied in most liquidation accounting, periodic financial reporting and final liquidation financial reports. Minority shareholdings were sparingly segregated / disclosed in insolvent and liquidating entities financial reporting; and no evidence of liquidation compensation payment made to small (less than 5% investors) equity holders as such action is not yet back-up by law. The paper concluded that there is need for harmonisation of standard on insolvency accounting globally because there is lack of uniformity in international standards followed in corporate insolvency accounting.