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does current year losses of rs 500000 prove that a company
lacks going concern
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Answer / bitto_agarwal
no unless all the mitigation factors are considered a
auditor cannot conclude that it lacks going concern
| Is This Answer Correct ? | 7 Yes | 0 No |
Answer / h.r. sreepada bhagi
Going concern concept of Accounting is applicable for
recording the transactions to enable preparation of
financial statements (P&L & B/S)at the end of the accounting
periods. Earning Profit or incurring loss in any year has no
bearing on this concept of accounting. Till a company is
wound-up, all transactions should be accounted assuming that
the company has a long existence (i.e for unknown future).
| Is This Answer Correct ? | 4 Yes | 0 No |
Answer / kapil kr. agrawal
NO..
Because An auditor has to consider the Indicators mentioned in
AS-1 Disclosure of Accounting Policies..
Some of the indicators are:
Negative Net Worth, Negative Cash Flow, Adverse Key Financial
Ratios, Inability to pay creditors etc...
Also auditor should note the past trends of the company like
is company consistently making default in paying creditors or
consistently a loss making company....
thanx..
| Is This Answer Correct ? | 2 Yes | 1 No |
Answer / g.vasudevan
No,here it is not proved that a company losses of Rs.500000
lacks going concern.Unless all the mitigation factors
should considered before declaring a concern going lacks.
| Is This Answer Correct ? | 1 Yes | 1 No |
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