Free Guide to
Bookkeeping Concepts

Accounting Bookkeeping Concepts PDF Cover

Receive our free 18-page Guide to Bookkeeping Concepts (PDF) when you subscribe to our free newsletter.

You are already subscribed. This offer is not available to existing subscribers.
Step 2: Please check your email and click the confirmation link.


What is going concern?

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.