2 min read
Definition
Going concern is the accounting assumption that a business will continue operating for at least the next twelve months and isn't about to be liquidated. Directors must assess and confirm it when signing off the accounts.
In plain terms
It's a statement of faith in the future, backed by evidence. If a company can't fund itself for the year ahead, that assumption is in doubt and must be flagged.
Why it matters for your company
A going-concern doubt affects how accounts are prepared and how lenders and auditors view the business. Robust cash forecasting supports the judgement. See how to forecast cash flow.
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