Going concern

Every set of accounts rests on a going concern assumption. If it does not hold, the accounts have to be prepared differently, and the trustees are in a different legal position.

The going concern assessment is not a formality: it is the moment trustees formally consider whether the charity can pay its debts as they fall due. Reaching the conclusion late is what creates exposure — for a charitable company or CIO, the point at which trustees knew or ought to have known there was no reasonable prospect of avoiding insolvent liquidation is measured from here.

Minute the conclusion and the reasoning, not just the answer. If the answer is uncertain, see spotting financial distress and take advice early — Business Debtline and R3 both offer free initial help.