The going concern principle assumes that any organization. Organizational structures will continue to operate its business for the foreseeable future. The principle purports that every decision in a company is taken with the objective in mind of running the business rather than that of liquidating it.

What is meant by going concern assumption?

What is the going concern principle? ... The going concern principle assumes the business's goal is to operate rather than liquidate its assets. If a company's auditor believes the company is not a going concern, the company typically must disclose that in its financial statements.

What is an example of going concern assumption?

An entity is assumed to be a going concern in the absence of significant information to the contrary. An example of such contrary information is an entity's inability to meet its obligations as they come due without substantial asset sales or debt restructurings.