022 - Going Concern Principle in Financial Reporting

Описание: Going Concern Principle: Ensuring Business Continuity in Financial Reporting

In this video, we delve into the Going Concern Principle, a fundamental accounting concept that assumes a business will continue operating for the foreseeable future without the need for liquidation or major downsizing. This principle plays a crucial role in financial reporting, ensuring that assets and liabilities are recorded based on their intended long-term use rather than immediate sale.

Key Topics Covered in This Video:
✅ Asset Valuation – Understand why assets are recorded at historical cost instead of liquidation value.
✅ Liability Management – Learn how businesses account for liabilities under the assumption of ongoing operations.
✅ Impact on Financial Statements – See how financial reports reflect continuity by maintaining long-term classifications for assets and liabilities.
✅ Indicators of Going Concern Issues – Identify red flags such as continuous losses, high debt burdens, and legal or regulatory challenges that may threaten a company’s future.
✅ Disclosures & Adjustments – Explore the required financial statement disclosures when going concern risks exist, including asset impairments and liability reclassifications.

By applying the Going Concern Principle, businesses promote transparent financial reporting, helping investors, creditors, and stakeholders assess long-term sustainability.

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