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Hi. I am new to studying F8 but I am reading about ‘going concern’.
If a company is assessed as a going concern for 12 months, what happens the next year?
Do certain improvements/changes need to take place?Also, how long can a company be assessed as a going concern? There is a part about the Management perhaps being unwilling to make or extend its assessment in the ACCA article but say the Management do want to does it just carry on?
How involved are the Auditors in the decision?
Thanks
Each year is assessed independently for going concern.
Going concern means that it is thought that the company will survive for the foreseeable future – which is assumed to be 12 months from when the FS are approved by the board.
If management do not want the business to continue and plans to close it down and sell it off bit by bit, it will not be a going concern and the assets should be valued on a break-up basis.
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