At Acromas, the balance sheet is more than £1bn in the red and a pre-tax loss of £300m was recorded in the year to January 2009. But Acromas is still regarded as a viable going concern.
One of the fundamental accounting concepts It is assumed that a company will continue in operational existence for the foreseeable future
A company that is expected to continue its activities in the near future The value of a going concern is assessed differently than a company that is expected to go out of business
The accounting assumption that an entity will have an indefinite future life (Source: FHA Handbook 4370 4 REV-1, Appendix 2)
The idea that an accounting entity will have a continuing existence for the foreseeable future
this concept is the underlying assumption which any accountant makes when he prepares a set of accounts That the business under consideration will remain in existence for the foreseeable future
an ongoing operating business enterprise Going Concern Valuethe value of a business enterprise that is expected to continue to operate into the future The intangible elements of Going Concern Value result from factors such as having a trained work force, an operational plant, and the necessary licenses, systems, and procedures in place Goodwillthat intangible asset arising as a result of name, reputation, customer loyalty, location, products, and similar factors not separately identified Goodwill Valuethe value attributable to goodwill Guideline Public Company Methoda method within the market approach whereby market multiples are derived from market prices of stocks of companies that are engaged in the same or similar lines of business, and that are actively traded on a free and open market back to top I
the assumption that a company will continue to be in operation in the near future, and therefore that assets should be valued for their ongoing use, rather than market liquidation value
Assumption that a business can remain in operation long enough for all of its current plans to be carried out
Refers to the ability of an organization to pay its debts as they fall due An organization, which is able to do so is a going concern One of the key assumptions underlying the general preparation of financial statements is that the basis that the organization is a going concern
The concept that a company has an indefinite lifespan When an analyst refers to "going concern", it usually means that a company is in real trouble and may go out of business