What does going concern mean on the CPA exam?
Going concern. The assumption that the entity will keep operating long enough to realize its assets and meet its obligations. Everything from classification to valuation rests on it, and doubt about it has to be disclosed.
Defined against ASC 205-40.
Which CPA exam sections use going concern?
Going concern appears in 6 CPA exam sections: AUD, BAR, FAR, ISC, REG, TCP.
Related terms
- liabilities assumed: Obligations the acquirer takes on as part of a combination.
- working capital: Current assets less current liabilities.
- held for sale: A classification for a component the entity is actively marketing and expects to sell within a year.
- transaction price: The consideration an entity expects to be entitled to for transferring goods or services, excluding amounts collected for third parties such as sales tax.