Cost card and Going concern: Difference between pages
imported>Doug Williamson (Create page. Sources: linked pages.) |
imported>Doug Williamson (Expand. Sources: linked pages.) |
||
| Line 1: | Line 1: | ||
1. | |||
A going concern is an entity which is commercially viable, able to pay its obligations as they fall due, and whose owners (or other controllers) intend it to continue in operation for the foreseeable future. | |||
The going concern concept is important in bank prudential regulation and capital requirements. | |||
To be fully effective as loss absorbing capacity, capital should absorb losses at the stage when the entity is still a going concern (and not yet a 'gone concern'). | |||
2. | |||
The going concern basis of accounting requires that the accounts are prepared using the assumption that the business will continue in operation for the foreseeable future (more than 12 months) and that there is neither the aim nor need to liquidate or limit significantly the nature of the operations. | |||
3. | |||
More generally, a basis of valuing a business on the assumption that it will continue in operation. | |||
Such a valuation may be made for accounting purposes or for other purposes. | |||
4. | |||
''Pensions''. | |||
The assumption that a pension scheme continues without being discontinued. | |||
Going concern valuations are made on such a basis. | |||
== See also == | == See also == | ||
* [[ | * [[Total Loss Absorbing Capacity]] | ||
* [[ | * [[Accounting concepts]] | ||
* [[ | * [[Accruals concept]] | ||
* [[ | * [[Additional Tier 1]] | ||
* [[ | * [[Asset value]] | ||
* [[ | * [[Consistency]] | ||
* [[ | * [[Disaggregation]] | ||
* [[ | * [[Discontinuance]] | ||
* [[Discontinuance method]] | |||
* [[Gone concern]] | |||
* [[Headroom]] | |||
* [[Liquidation value]] | |||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
Revision as of 13:09, 10 November 2016
1.
A going concern is an entity which is commercially viable, able to pay its obligations as they fall due, and whose owners (or other controllers) intend it to continue in operation for the foreseeable future.
The going concern concept is important in bank prudential regulation and capital requirements.
To be fully effective as loss absorbing capacity, capital should absorb losses at the stage when the entity is still a going concern (and not yet a 'gone concern').
2.
The going concern basis of accounting requires that the accounts are prepared using the assumption that the business will continue in operation for the foreseeable future (more than 12 months) and that there is neither the aim nor need to liquidate or limit significantly the nature of the operations.
3.
More generally, a basis of valuing a business on the assumption that it will continue in operation.
Such a valuation may be made for accounting purposes or for other purposes.
4.
Pensions.
The assumption that a pension scheme continues without being discontinued.
Going concern valuations are made on such a basis.
