If you run a company, you may come across the term ‘going concern’. Going concern describes a business likely to avoid liquidation for the foreseeable future as it can meet its financial obligations. This article will describe some key features of going concern, alongside some instances when it may be relevant to your business.<\/p>\n\n\n\n
As mentioned, ‘going concern’ reflects that your company’s financial statements show that it is likely to continue operating for the foreseeable future (usually around 12 months). Operating on a going concern basis shows that your business intends to keep its operations and activities going for at least the next year without liquidation concerns. Liquidation is where you sell the assets of a business to pay back its debts. <\/p>\n\n\n\n
Company directors will assess going concern<\/a> when reviewing whether a business can operate as part of its financial statement. Financial statements are usually made on an annual or bi-annual basis. If a director is planning to proceed to liquidation or stop trading, the company will not be able to continue on a going concern basis.\u00a0<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n