The Financial Accounting Standards Board (FASB), responsible for establishing and improving financial accounting standards and reporting by non-governmental entities issued a new standard on Wednesday regarding disclosures by corporate managers. This new standard was issued an in effort to create uniform disclosure procedures by corporate managers upon finding substantial doubt about their organization’s ability to continue as a going concern.

The update “Presentation of Financial Statements – Going Concern (Suptopic 205-40): Disclosure of Uncertanties About an Entity’s Ability to Continue as a Going Concern,” applies to all companies including not-for-profits. It will take effect in annual periods ending after December 15, 2016 and in interim periods with annual periods beginning after December 15, 2016.

The standard requires managers to evaluate whether the entity will be able to continue as a going concern and provide relevant footnote disclosures in the financial statements. It concretely defines managers’ responsibilities regarding the timing and content of said footnote disclosures.

Prior to this standard, there were no specific guidelines under the U.S. Generally Accepted Accounting Principles (GAAP) regarding disclosures, leaving executives the option to make voluntary disclosures at their discretion. During the financial crisis, investors became frustrated with the lack of going concern opinions. Although a proposal was issued by the FASB at the peak of the financial crisis in 2008, debate and revisions delayed the issuing of a standard until now.

Under this standard, managers will be required to disclose serious risks, even if a plan is in place to alleviate the substantial doubt.