Applied Aspects Of The Analysis Of Financial Statements In The Context Of The Concept "Going Concern"

The going concern assumption isa fundamental concept in the preparation of financial statements. The present study presents the normative base on the issue both in Bulgaria, and in countries complying with the International Accounting Standards. There are revealed somediscrepancies inthe normative system in this country, concerning the point in time, in which thereshould be suspended the use of "going concern" as the appropriate accounting basis. There ispresented a method for the evaluation of the going concern, consisting of two stages. The first stage is prior to the making of the financial statement, the aim being estimation on the part of the management of the capability of the enterprise to continue its activity on the basis of analysis ofinformation on the organizational, administrative and market environment. The second stage is ananalysis of significant indicators and coefficients for estimation, based on information from thealready prepared financial statement on the part of the external consumers. The proposed methodforevaluation of the going concern is illustrated with the example of a public enterprise from thetobacco industry, which is declared in liquidation towards the end of the analyzed period.