Going Concern
Short definition
Going concern is the assumption the firm will continue without liquidation for the foreseeable future. Accounts and the audit rest on it; cash and the maturity wall can break it.
Detailed explanation
Uncertainty produces a disclosure and an auditor emphasis. Banks and suppliers can treat a going-concern note as a credit event.
The assumption rests on a 12-month cash and refinancing plan. A negative 13-week breaks going concern in treasury before it breaks in accounting.
Why it matters for the CFO
A going-concern note can trigger covenants, collateral and customer contracts. An early cash plan is cheaper than the note.
How to read it
Going concern is a cash and refinancing claim, not a profit claim. Management’s assessment is weak without a stress scenario.
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Definitions are educational. They are not investment, credit or tax advice.