Going Concern Principle The going concern principle , applied when preparing financial statements, assumes that the company will continue its operations for the foreseeable future without any plans for liquidation or bankruptcy, unless there is evidence suggesting otherwise. If circumstances arise that indicate potential financial difficulties, management must assess whether the assumption of continuity remains valid.
Ensure Your Company’s Future with PKF’s Expert Going Concern Analysis At PKF, our going concern analysis allows business owners to take an in-depth look not only at their company's financial health but also at the financial condition of their clients and suppliers.
Our service includes: Analysis of financial data and circumstances significantly threatening business continuity, such as :financial health of key suppliers and customers disruptions in the supply chain liquidity and solvency of the entity, including external financing underutilized production capacity, labor shortages industry changes additional operational costs due to changing market conditions opportunities for financial aid, including government and non-governmental assistance regulatory changes Risk Assessment we evaluate the significance of risks that may threaten business continuity Identification of Risk Areas we identify areas that require intervention to mitigate the risk of disruptions to business continuity The outcome of the analysis is a forecast and business plan tailored to the company's needs, ensuring a strategy for at least the next 12 months.
Who is the Going Concern Analysis Service for? We offer this service to any business owner who aims to run their company responsibly and efficiently.
Benefits of Conducting a Going Concern Analysis: Informed Business Decisions
By providing key information on a company’s ability to survive and grow, our going concern analysis enables entrepreneurs to make informed decisions about investments, expansion, or restructuring.
Compliance with Legal Requirements
Legal regulations require businesses to regularly assess and report their ability to continue operations. This is particularly crucial for publicly listed companies, which must adhere to strict financial reporting standards.
Investor and Lender Confidence
Conducting a going concern analysis can enhance trust among investors and lenders. A well-prepared report demonstrates that the business is responsible and proactively manages risks.
Early Problem Detection
Regular going concern analysis helps identify potential financial or operational issues early, enabling the company to take corrective action before problems become significant and difficult to resolve.
Support for Strategic Planning
The analysis provides valuable insights for strategic planning, helping businesses understand the necessary steps to ensure long-term stability and growth.
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