Debt buyer Pioneer Credit faces a material uncertainty that may cast doubt on the company's ability to continue as a going concern.Pioneer's 2018/19 financial report, released yesterday, includes a statement by the directors that there are reasonable grounds to believe that the company will be able to achieve a restructuring of its debt, a recapitalisation through an equity raising or realisation of value by way of sale of some of its assets.On September 2, Pioneer warned it was at risk of breaching a financial covenant under its senior financing facility.Last week, it reported that events of default had occurred and that it had entered into a standstill agreement with its senior financiers, Bankwest and Westpac, giving the company some breathing space before lenders take action.The cause of the problem is a material difference in the company's expected net profit for 2018/19 due to the classification and measurement of its financial assets at amortised cost.The application of amortised cost to more than 900 debt portfolios changed the timing of when earnings are recognised in the accounts. The change explained the fall in earnings from $17.6 million in 2017/18 to $4.3 million for the year to June.The fall in earnings triggered a breach of the company's financial covenants under its senior financing facility.A working capital deficit was caused by the classification of $169.4 million of borrowings as current liabilities.Pioneer has appointed Azure Capital to assess proposals received for the realisation of the value of its assets, including change of control proposals, and for the provision of alternative funding if required.The company said there has been no diminution in total expected liquidations of its debt portfolios, which captures the expected timing of forecast cash flows. Debt portfolio liquidations rose 17 per cent to $118.5 million in 2018/19.Pioneer spent $76 million on debt portfolio purchases in the year to June.Pioneer chair Michael Smith said in a statement: "Despite a disappointing NPAT outcome due to the application of amortised cost to our portfolio, we are pleased with the growth metrics not impacted by the accounting change, in particular the record EBITDA and cash liquidations."The company's business fundamentals remain strong. It continues to fund its PDP forward flow commitments in a sustainable manner from cash flow."