2 min read
Definition
Going concern is the accounting assumption that a business will continue operating for the foreseeable future — at least the next twelve months — and so does not need to be valued as if it were being wound up.
In plain terms
Accounts are normally prepared on this basis. If directors have serious doubts about survival, they must say so, and the accounts may need to be prepared differently. It is a health flag hiding in plain sight.
Why it matters for your company
A going-concern qualification in accounts is a serious warning to lenders, suppliers and investors. Maintaining genuine going-concern status — often through adequate working capital and finance — protects the company's standing and access to credit.
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