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Going concern is one the fundamental assumptions in accounting on the basis of which financial statements are prepared. Financial statements are prepared assuming that a business entity will continue to operate in the foreseeable future without the need or intention on the part of management to liquidate the entity or to significantly curtail its operational activities. Therefore, it is assumed that the entity will realize its assets and settle its obligations in the normal course of the business.
It is the responsibility of the management of a company to determine whether the going concern assumption is appropriate in the preparation of financial statements. If the going concern assumption is considered by the management to be invalid, the financial statements of the entity would need to be prepared on break up basis. This means that assets will be recognized at amount which is expected to be realized from its sale (net of selling costs) rather than from its continuing use in the ordinary course of the business. Assets are valued for their individual worth rather than their value as a combined unit. Liabilities shall be recognized at amounts that are likely to be settled.
In additions to all aothers defined by fellows but one thing I just add
you are establishing your policies and strategies and also recording the accounting transaction with the view that business is carrying for a unfinite period.
A company that has the resources needed in order to continue to operate indefinitely. If a company is not a going concern, it means the company has gone bankrupt
Going Concern is one of the concept in accounting which states that the business will run for an indifinite period of time .
Going concern means the business will keep on running after first transaction for an uncertan period in future to earn profit
Going concern is a basic underlying assumption in accounting. The assumption is that a company or other entity will be able to continue operating for a period of time that is sufficient to carry out its commitments, obligations, objectives, and so on. In other words, the company will not have to liquidate or be forced out of business in the foreseeable future.
The going concern provides some logic for the cost principle: If a company is a going concern, it is not planning to liquidate, so why report the current value of its long term assets? However, if an asset's value has been impaired, the asset's carrying amount might be reduced to an amount lower than its carrying value.
A company whose intention is to keep the business on for unlimited time period.
Means business will stay in operation for the foreseeable future.
That is an continuing in operation for the forcebale future. it assumed that the enterprise neither the intention nor the necessaity of liqudation or curtailing materialiry in the scale of operation...
