Going concern, support of directors

[singlemalt]

Hi all,

I have a competitor who has posted abbreviated full accounts (ie, unaudited, no revenue statement) containing the statement:

Going Concern
The Accounts have been prepared on the going concern basis, based on the continued financial support of the directors.

I wanted to double check, does this mean the company would cease to be a going concern without that financial support?

Many thanks.

 

[Frank the Insurance guy]

I had this on my accounts in the first year of business, as we were running at a loss due for 1st year set up costs etc. I had to confirm I would continue to fund the business and any losses on an ongoing basis.

 

[Mark T Jones]

Technically, yes. It applies to a lot of small owner-managed businesses (often called lifestyle businesses)

Like most of these things, it really has little significance as a stand-alone item.

 

[singlemalt]

Technically, yes. It applies to a lot of small owner-managed businesses (often called lifestyle businesses)

Like most of these things, it really has little significance as a stand-alone item.

Many thanks for that - the business in question us turning over ~£1.5m and carrying quite a bit of debt. Employs 20 people.

 

[Mark T Jones]

Many thanks for that - the business in question us turning over ~£1.5m and carrying quite a bit of debt. Employs 20 people.

TBH it sounds a bit like you're painting your own picture for your own means.

What is 'quite a bit of debt'?
What type of debt? For what purpose?

What are the directors/ owners taking out of the business?

What are their personal means?

Just a few of the questions I'd ask before drawing any conclusions

 

[singlemalt]

TBH it sounds a bit like you're painting your own picture for your own means.

What is 'quite a bit of debt'?
What type of debt? For what purpose?

What are the directors/ owners taking out of the business?

What are their personal means?

Just a few of the questions I'd ask before drawing and conclusions

No, I know the individual quite well and I know the business. I was just double checking my understanding of the accounting statement was correct.

It was just interesting to see this statement because as it adds depth to the picture I already have as I may approach them to do something with them.