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Hello Open Tuition
Going concern is an accounting concept that implies that a business will continue to operate into the foreseeable future. I feel this concept is contradictory with IAS 37… according to IAS 37, a provision for future trading losses should not be made as there is no present obligation i.e. the business can cease trading and is not obliged to be in business.
IAS 37 says that future trading losses cannot be provided for a business as it has no obligation to continue existing in the future yet the going concern concept states that the business will continue to exist in the future.
Please help me clarify this issue. Thank you
I have never seen this argument presented until today. 🙂
In summary:
1. GC assumes that we will continue.
2. But we don’t have to.Feels almost philosophical. But I can’t see any alternative.
Sorry I can’t help more.
But, if I think of anything else, I will post again.
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