According to going concern disclosure requirements, when must substantial doubt about a company's financial obligations be disclosed?

The requirement to disclose substantial doubt about a company's ability to meet its financial obligations is rooted in the principle of transparency and accountability in financial reporting. Substantial doubt exists when a company's ongoing viability is uncertain, which could potentially mislead stakeholders if not disclosed.

The correct answer emphasizes that disclosure is necessary when there is substantial doubt about the company's ability to fulfill its obligations within a reasonable time. This aligns with accounting standards that require management to assess and disclose issues that might adversely affect the company’s ability to continue operating. Timely disclosure allows investors, creditors, and other stakeholders to make informed decisions based on the company’s financial health as they consider risks and potential future performance.

In contrast, some scenarios provided in the other choices do not capture the broader requirement for disclosure. Solely recognizing complete insolvency or only extreme cases fails to address situations where a company might be facing financial difficulties without being completely unable to meet its obligations. Furthermore, disclosing actions taken to rectify the situation does not inherently mean that substantial doubt has been mitigated, hence it is not a standalone criterion for disclosure.

Therefore, the emphasis on significant doubt about fulfilling financial obligations within a reasonable timeframe ensures that financial reporting remains relevant and useful for evaluating the risks associated with the viability of the company