MA

Going concern concept The going concern concept assumes that an enterprise or the accounting entity ha s an indefinite or unlimited life or existence. It means that the intention of t he business is to carry for a sufficiently long period of time to carry out its existing activities and commitments. It will not be liquidated or dissolved in t he immediate future unless there is clear evidence or a specific instruction to the contrary. For Example: - where the venture is for a specific purpose like setting up a sta ll in an exhibition or fair or the construction of a building or bridge etc. und er a contract, the business comes to an end on the completion of the project. Experience indicates that in spite of several business failures, enterprises hav e a fairly high continuance rate; certain entities have been in existence for mo re than a century even though the owners have changed. The business entities are therefore going concerns in the majority of the cases and it has proved useful to adopt continuity assumption for accounting purposes.