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Accounting
Going Concern Assumption
The assumption that a company will continue operating for the foreseeable future and not be forced to liquidate.
The going concern assumption affects how assets and liabilities are valued. If the company is not a going concern, assets are valued at liquidation (fire-sale) prices instead of normal use.
It's the default setting that says 'this business will still be here next year and the year after'.
Real world: When auditors sign off on financial statements they assume the company is a going concern. If there is doubt (heavy losses, debt problems), they must add a warning paragraph to the audit report.
💡 Almost all accounting is built on the belief that the company will keep running.