Posted on Friday, 7th May 2010 by Vanessa Miller
If you are selling your business as a going concern you are selling the business as an on-going trading activity.
If you are selling your business as a going concern rather than selling the individual assets of that business, you will need to be able to demonstrate to potential buyers that they will be able to walk into your business and take over without any major problems from day-one.
In accounting terms, “going concern” refers to a company’s ability to continue functioning as a business entity into the foreseeable future. If a company is not considered a going concern then it is required to disclose this fact in its financial statements or if there are any factors that may put the company’s status as a going concern in doubt.
So a buyer of a business will be extremely interested in the “Going Concern Value” aspect of the business, which is usually higher than the individual assets of the business, so long as the business is profitable and has good cash flow.
Similar Posts:
- Financial Components of a Business Plan
- Capital Budgeting
- Small business software
- Order Bank Checks
- Game on: Number nonsense continues
Tags: Concern, Going Concern
Posted in Business FAQ | No Comments »