going concern principle
going concern assumption

The implications of this going concern principle are critical.

The historical cost principle (described below) would be of limited usefulness if it were not for the going concern principle.

The going concern principle allows the company to defer some of its prepaid expenses until future accounting periods.

Article 54 During the preparation of the annual accounts it should be taken into consideration that the enterprise will continue its activity and no considerable decline of this activity is expected (on going concern principle).

Tangible asset backing is determined based on a going concern assumption.

I think fair value accounting is a great snapshot if there are doubts about the going concern assumption of a business.

Under the going concern assumption, an entity is viewed as continuing in business for the foreseeable future.

The going concern assumption is a fundamental assumption in the preparation of financial statements.

The Cadbury Committee suggests auditors should test going concern assumptions, and give an opinion on the directors' report.

On the other hand, inappropriate use of the going concern assumption by an entity may cause the auditor to issue an adverse opinion on the financial statements.

If future events render the going concern assumption inappropriate, adjustments would be necessary to the carrying value of assets and liabilities and the reported operations in the financial statements.

In some circumstances, consideration may need to be given to management's assessment of the impact of issues arising from the introduction of the euro on the going concern assumption.

The going concern assumption is universally understood and accepted by accounting professionals; however, it has never been formally incorporated into U.S GAAP.

"An Intelligent Decision Support System for Evaluating Business Risk and the Going Concern Assumption", University of Manitoba, March 6, 1992.

Asset-Based Approach An asset-based approach is appropriate under the going concern assumption where the underlying value of the company relates to its assets (as opposed to operating cash flow).

The Cadbury Report3 and the Vienot Report³ propose that directors should be required to satisfy themselves that the going concern assumption is reasonable and that they should report accordingly to shareholders.

When the use of the going concern assumption is appropriate, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.

Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations.

Going concern assumption: meaning that the business is going to be operated for non predefined period, in other words, there is no ending date for business life.This accounting principle requires companies to use the accrual basis of accounting.

Ordinarily, information that significantly contradicts the going concern assumption relates to the entity's inability to continue to meet its obligations as they become due without substantial disposition of assets outside the ordinary course of business, restructuring of debt, externally forced revisions of its operations, or similar actions.