Fiducia TogetherGoing concern
The assumption that the business will still be trading in twelve months. Accounts are prepared on it.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
Financial statements are normally prepared on the going concern basis, assuming the business will continue operating for at least twelve months from approval.
Why it matters
If that assumption is not safe, the accounts have to say so and assets may need restating at what they would fetch in a break-up. That disclosure is visible to everyone who reads the accounts.
What it looks like in practice
Directors have to consider it and document the consideration, particularly where there are losses, tight cash or expiring facilities.
What to watch out for
A going concern qualification is a serious signal to lenders, customers and suppliers. If one is likely, take advice early — see wrongful trading.
Where to get proper advice
Your accountant, and a licensed insolvency practitioner if the answer is in doubt. That conversation is free and going early preserves options.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.