Going concern is a basic underlying assumption in accounting. The assumption is that a company or other entity will be able to continue operating for a period of time that is sufficient to carry out its commitments, obligations, objectives, and so on. In other words, the company will not have to liquidate or be forced out of business in the foreseeable future.

The going concern provides some logic for the cost principle: If a company is a going concern, it is not planning to liquidate, so why report the current value of its long term assets? However, if an asset's value has been impaired, the asset's carrying amount might be reduced to an amount lower than its carrying value.

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