What is Going Concern Concept?
Going Concern Concept means an organisation would continue its business operations indefinitely till the concept of bankruptcy and/or liquidation invades. This concept assumes that a business will continue to do its operations for the foreseeable future or at least for the next 12 months. The going concern concept has the following assumptions:
- Acceptability of the core product: The company must have reasonably priced goods with innovation to beat its rival firms. The company must provide the customers with good quality products at reasonable prices to retain the customers and to acquire new customers.
- Margin, Growth, and Volumes: An ideal going concern concept firm must have higher sales figures than the previous year. A higher operating and net profit margin is expected from the firm under going concern concept.
Table of Content
- Features of Going Concern Concept
- Examples of Going Concern Concept
- Significance of Going Concern Concept
- Limitations of Going Concern Concept