The effect of the going concern concept has an affirmative
effect on the amounts at which long terms are carried on the
balance sheet:
- The fixed assets having long production life, well be
depreciated through out their life period.
- The long term loans or notes can be written by the companies ,
which are paid off in considerable long period of time.
- The equity share are been issued and transferred from one
shareholder to another because of the going concern concept of the
company.
- The earnings of the company towards the shareholders or owners
of the company are got accumulated under the Retained Earnings
keeping in mind the fund requirement for the development and growth
of the company.
- Various long term purchase and sell-out agreement are entered
and forms the part of the balance sheet.
Thus, the concept says that the concern will carry on the
business until the final dissolution of the assets of the company
take place. The company will carry on Assets and Liabilities for
very long terms.
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