Audit & Assurance

Going Concern

Going concern is the concept that a business is expected to continue operating long enough to meet its obligations and carry out its plans.

Quick answer

Going concern is the concept that a business is expected to continue operating long enough to meet its obligations and carry out its plans.

It matters because severe cash or debt problems can trigger reporting disclosures and lender or investor concern.

A business burning cash with limited financing may raise a going concern question in its financial reporting.

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Plain-English Definition

What Going Concern means

Going concern is the concept that a business is expected to continue operating long enough to meet its obligations and carry out its plans.

Why it matters It matters because severe cash or debt problems can trigger reporting disclosures and lender or investor concern.
Simple example A business burning cash with limited financing may raise a going concern question in its financial reporting.
Related Questions

Questions people ask about Going Concern

What does Going Concern mean?

Going concern is the concept that a business is expected to continue operating long enough to meet its obligations and carry out its plans.

Why does Going Concern matter?

It matters because severe cash or debt problems can trigger reporting disclosures and lender or investor concern.

What is a simple example of Going Concern?

A business burning cash with limited financing may raise a going concern question in its financial reporting.

When should I ask a CPA about Going Concern?

Ask a CPA when the term affects lender requests, financial statement work, compliance needs, or an IRS or regulator issue.

How is Going Concern different from Working Capital?

Going Concern means Going concern is the concept that a business is expected to continue operating long enough to meet its obligations and carry out its plans. Working Capital means Working capital is the difference between current assets and current liabilities, often used as a simple measure of short-term liquidity. The difference is that they apply to different tax, accounting, or business situations and should not be treated as interchangeable.

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