Going concern, substantial doubt, continuing business, operating loss, defaulting on loans, legal proceeds, interim assessments, cessation of business.


The going concern principle assumes that an entity will continue to exist into the future. This assumption implies that the entity will not be compelled to end their operations, liquidate their assets, or go into bankruptcy. It is an integral assumption in financial statements since it allows for the deferral of recognition of certain expenses until a period of time into the future, when the company is still assumed to exist. Members of management, as well as financial statement auditors, are required to identify signs that could indicate that an entity will not be able to continue their operations into the near future. Some of these signs include a trend of operating losses, loan defaults, legal proceedings against the entity and so forth. The Financial Accounting Standards Board (FASB) updated the going concern guidelines so that issuers of financial statements are uniform in frequency and substance of going concern determination. Prior to the Accounting Standards Update, U.S. GAAP lacked sufficient guidance about managements responsibility to evaluate whether there is substantial doubt of the entitys ability to continue as going concern. In order to clarify the uncertainty, FASB issued a new financial reporting standard. This new reporting will be in effect for the annual period ending after December 15, 2016. The updated standard will require management to perform annual and interim assessments of an entitys ability to continue as a going concern for one ye

Full Text : PDF

  • Arellano, M. and Bond, S., 1991. Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58: 277–297.
  • Baltagi, B., 1995. The Econometric Analysis of Panel Data. Wiley, New York, NY.
  • Bordo, D., Eichengreen, B., and Irwin, D., 1999. Is Globalization Today Really Different than Globalization a Hundred Years Ago? NBER, Working Paper 7195.
  • Castells, M., 1996. The Rise of the Networked Society. Oxford: Blackwell.
  • Castells, M., 2001. Information technology and global capitalism, in: Hutton, W., and Giddens, A. (eds.), On The Edge. Living with global capitalism, London: Vintage.
  • Clark, C., 2000. Environmental Globalization, in: Nye, J., and Donahue, J., (eds.), Governance in a Globalizing World. Brookings Institution Press, Washington, D.C.: 86-108.
  • Diamond, L., 1992. The Democratic Revolution; Struggles for Freedom and Pluralism in the Developing World. Boston Freedom House.
  • Dreher, A., 2006. Does Globalization Affect Growth? Evidence from a new Index of Globalization. Applied Economics, 38, 10: 1091-1110.
  • Dreher, A., Gaston, N., and Martens, P., 2008. Measuring Globalization - Gauging its Consequence. New York: Springer.
  • Feenstra, C., and Hanson, H., 1997. Foreign Direct Investment and Relative Wages: Evidence from Mexico’s Maquiladoras. Journal of International Economics, vol. 42, pp. 371-93.
  • Fishlow, A., and Haggard, S., 1992. The United States and the Regionalization of the World Economy. OECD Development Centre, Paris.
  • Gee, P., Hull, L. and Lankshear, C., 1996. The New Work Order, behind the language of the new capitalism. St. Leonards, Aus.: Allen and Unwin.
  • Gengler, J., 2015.  Group Conflict and Political Mobilization in Bahrain and the Arab Gulf: Rethinking the Rentier State. Bloomington: Indiana University Press, p. 96
  • Hakimian, H., 2000. Economics from East to West Asia: Lessons of Globalization, Crisis and              Economic Reform. School of Oriental and African Studies, SOAS Working Paper No. 82.
  • Heritage foundation, 2015. The Index of Economic Freedom, Wall Street Journal.
  • Huntington, S., 2009. How countries Democratize? Political Science Quarterly, 124:1, 31-69.
  • Hutton, W., and Giddens, A. (eds.), 2001. On The Edge, Living with global capitalism. London: Vintage.
  • IMF, 2014. International Monetary Fund’s World Economic Outlook 2014.
  • Keohane, O., and Nye, J., 2000. Introduction, in: Nye, J., and Donahue, J., (eds.), Governance in a Globalizing World. Brookings Institution Press, Washington, D.C.: 1-44.
  • KOF Swiss Economic Institute, 2014. KOF Index of Globalization 2014, Press Release.
  • Lall, S., 2002. The Employment Impact of Globalization in Developing Countries. QEH Working Paper Series, QEHWPS93, Working Paper No. 93.
  • Lee, E., and Vivarelli, M. (eds.), 2004. Understanding Globalization, Employment and Poverty Reduction, Palgrave Macmillan, New York.
  • Lee, E., and Vivarelli, M., 2006. The Social Impact of Globalization in the Developing. Institute for the Study of Labor Countries, Discussion Paper Theory, IZA DP No. 1925.
  • Leys, C., 2001. Market-Driven Politics. Neoliberal democracy and the public interest. London: Verso Books.
  • Norris, P., 2000. Global Governance and Cosmopolitan Citizens, in: Nye, J., and Donahue, J., (eds.), Governance in a Globalizing World. Brookings Institution Press, Washington, D.C.: 155-177.
  • OECD (Organization for Economic Cooperation and Development), 2011. MENA Initiative on Governance and Investment for Development.
  • Oman, C., 1994. Globalization and Regionalization: The Challenge for Developing Countries. 
  •            OECD Development Centre, Paris.
  • Rao, B., Vadlamannati, K., 2011. Globalization and growth in the low income African countries with the extreme bounds analysis. Economic Modelling, 28: 795–805.
  • Romer, M., 1990. Endogenous Technological Change. Journal of Political Economy 98(5), pp. 71-102.
  • Rosenau, N., 1997. The Complexities and Contradictions of Globalization. Current History, Vol. 96, No. 613.
  • Sayan, S., 2009. Economic Performance in the Middle East and North Africa Institutions, Corruption and Reform. Routledge, 8 B/W Illus.
  • Scholte, J., 2005. Globalization: a critical introduction. Palgrave Macmillan, Second Edition.
  • Shin, C., 1994. On the Third Wave of Democratization: A Synthesis and Evaluation of Recent Theory and Research. World Politics, 47:135-70.
  • Spence, M.and Leipziger, D., 2010. Globalization and Growth - Implications for a Post-Crisis World: Commission on Growth and Development. Commission on Growth and Development. World Bank Group. World Bank.
  • License: CC BY 3.0 IGO.
  • Stolper, W., and Samuelson, A., 1941. Protection and Real Wages. Review of Economic Studies, vol. 9, pp.58-73.
  • Strange, S., 1996. The Retreat of the State: The Diffusion of Power in the World Economy. Cambridge University Press, New York.
  • The Economist Intelligence Unit, 2014. Democracy Index 2014: Democracy and its discontents, Intelligence Unit Report.
  • The Fragile States Index, 2015. The Fund for peace (FFP), Washington.
  • Unger, R., 1997. Globalization as an Instrument of Exploitation, paper presented at a conference on Globalization, University of São Paulo, Brazil.
  • Wade, R., 1996. Globalization and its Limits: Reports of the Death of the National Economy Are Greatly Exaggerated, in: Berger, S., and Dore, R. (eds.), National Diversity and Global Capitalism. Cornell University Press, Ithaca, New York.
  • Wiggins, V., and Poi, B., 2003. Testing for panel-level heteroskedasticity and autocorrelation. StataCorp FAQs. (Revised on April, 3, 2008).
  • Wolf, A., 2002. Does Education Matter? Myths about education and economic growth, London: Penguin.
  • Wooldridge, J., 2002. Econometric analysis of cross section and panel data. The MIT press.
  • World Bank, 1999. World Development Report 1998/99: Knowledge for Development. Washington: World Bank.
  • World Bank, 2011. Towards a New Partnership for Inclusive Growth in the MENA Region. Washington DC: World Bank Group.
  • World Bank, 2015. The Economic Outlook for the Middle East and North Africa. Washington: World Bank.
  • World Bank, World Development Report and Country Report (various editions). Washington: World Bank.
  • Yifu Lin, J., 2008. The Impact of the Financial Crisis on Developing Countries. Korea Development Institute, Seoul.