Going concern in financial management, Financial Management

Assignment Help:

Going Concern in Financial Management

Going concern means in which business activities will continue for a fairly long period of time unless and until the business has entered into a procedure of liquidation.  This concept does not mean in which the business will continue for an infinite period of time, but it denotes in which the business is going to run for fairly long period of time so as to carry out business plans.

Under this concept it is assumed in which the business activities will continue for at least a period of time essential to meet its present contractual obligations and recover the original cost of its fixed assets.  This concept denotes in which the assets are obtains for utilization and not for resale. Under this concept utilization of resources for producing excellence and realization of revenue through their sale assumes significance.  Income is determined after charging cost of utilised resources to the revenue of that period.  Revenue and costs are recognized as and while they are earned or incurred and recorded in the financial statement of the period that they relate to.  This denotes that valuation of the business is completed on the basis of earning power rather than on the primary of the liquidation price of the enterprise.  This concept justifies for revenue realisation.  The revenue would be deemed to be realized along with the transfer of ownership of goods or services rendered.  Goods could be sold for cash or credit, thus earning of revenue is hard from cash collection from customers.


Related Discussions:- Going concern in financial management

Average collection period ratio, What is Average Collection Period Ratio? P...

What is Average Collection Period Ratio? Please provide me report on Average Collection Period Ratio.

Determine in brief about venture capitalists, Determine in brief about Vent...

Determine in brief about Venture capitalists Venture capitalists are organisations which take on risky business ventures. They provide finance for and generally require a high

Payback period, Can some one tell me how to calculate payback period and wh...

Can some one tell me how to calculate payback period and which formula i used to calculated payback period? Explain!!!!

Calculate the quality spread differential, Alpha and Beta Companies can bor...

Alpha and Beta Companies can borrow at the subsequent rates.                                                            Alpha               Beta Moody's credit rating

Working capital cycle, Q. Working capital cycle? In a manufacturing con...

Q. Working capital cycle? In a manufacturing concern the working capital cycle is start with the purchase of the raw material and ends with the realization of the cash from the

Analyse interest rate swap and currency swap, Problem: (a) Critically ...

Problem: (a) Critically analyse interest rate swap and currency swap. (b) Explain why a bank may face credit risk when it enters into offsetting swap contracts. (c) Two

Explain restatement of investment appraisal, Restatement of investment appr...

Restatement of investment appraisal In the following solution the tax allowances in relation to the initial outlay on equipment are evaluated separately. Other approaches are a

Define the type of bond instrument, You are an investment banker advising a...

You are an investment banker advising a Eurobank with reference to a new international bond offering it is considering.  The carries on are to be employed to fund Eurodollar loans

Describe the merits and demerits of mutual funds, Question 1 Briefly expla...

Question 1 Briefly explain the important legislations that regulates the insurance sector Question 2 What do you mean by sales cycle? Briefly explain the different stages in

Illustrate earning yield method, Q. Illustrate Earning Yield Method? Ea...

Q. Illustrate Earning Yield Method? Earning Yield Method: - As per this method, cost of equity capital is calculated by establishing a relationship between earning per share an

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd