Question

How the going concern assumption affect the financial statements we prepared?

Answer 1

The going concern principle is a fundamental financial statement assumption that assumes an entity will remain in business for the foreseeable future. Remaining in business means that the entity will not be compelled to end their operations, liquidate their assets, or go into bankruptcy.

The Enterprise is normally viewed as going concern that is as continuous continue the operation in the foreseeable future. it is assumed that the enterprise has neither necessity nor the intention of liquidation are curtailing the materiality of the scale of operations

If the business shows signs that it is not in the position to be assumed to continue to exist into the near future, this is known as going concern risk.

If the going concern is not opted then the the necessary disclosure should be presented in the financial statements of the company