Fortführungsprinzip

Fortführungsprinzip refers to a fundamental accounting principle that assumes a business will continue to operate in the foreseeable future. This principle, also known as the going concern assumption, is crucial for financial reporting as it underpins many accounting procedures and valuations.

If the Fortführungsprinzip is applied, assets are typically recorded at their historical cost and depreciated over their useful lives, rather than being valued at their liquidation value. Similarly, liabilities are recognized based on the expectation that the business will be able to meet its obligations as they fall due. The preparation of financial statements relies heavily on this assumption, allowing for projections and accruals that would be meaningless if the business were expected to cease operations.

However, if there is significant doubt about a company's ability to continue as a going concern, this assumption must be re-evaluated. In such cases, financial statements may need to be prepared on a different basis, such as a liquidation basis, which would reflect the expected realizable value of assets and the settlement amounts of liabilities in an event of closure. The auditor's report will also typically address the validity of the Fortführungsprinzip.