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Company not a going concern

Company not a going concern

I prepared accounts for a client in October/November last year on a going concern basis but was asked not to file them in case the company proved not to be a going concern. A sale is currently being negotiated for the business of the company at a significant loss. Should I therefore amend the accounts to a break up basis and how should I value the business when the final figures have not been agreed?

Any suggestions would be gratefully received.
Thank you.


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By bkrajiv
10th May 2012 16:15

Company not a going concern
Technically you cannot in the event prepare accounts on a going concern basis. Any other basis ( which is not described by the standard ) is to be used. A break up basis will suffice , you will know what the debtors, cash and creditors postion is, what you may not have is the NRV for any fixed assets and you can then include these at cost as long as this is disclosed.

Ehat you will also need to disclose is the reason for not preparing accounts under going concern and if an audit an emphasis of mater as well.

Trust this helps

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11th May 2012 20:29

Thank you - you have confirmed my thoughts. I am just nervous in case anyone sees the accounts before the sale is announced and the impact it may then have on the sale/business. So I appreciate having it pointed out that I have no choice. Except maybe I just wont file any accounts and have the company struck off before anyone other than Companies House notices the accounts are late!

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