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ИД «Финансы и кредит»






Economic Analysis: Theory and Practice

The going concern concept in the assessment of creditworthiness of economic entities

Vol. 16, Iss. 10, OCTOBER 2017

PDF  Article PDF Version

Received: 2 October 2017

Received in revised form: 6 October 2017

Accepted: 12 October 2017

Available online: 27 October 2017


JEL Classification: O12, Q01

Pages: 1840–1858


Babicheva N.E. Voronezh State University, Voronezh, Russian Federation

Lyubushin N.P. Voronezh State University, Voronezh, Russian Federation

Kondrat'ev R.Yu. Lipetsk Branch of Financial University under Government of Russian Federation, Lipetsk, Russian Federation

Subject The article analyzes existing contradictions in the implementation of the going concern principle and securing the creditworthiness.
Objectives The aim is to provide a unique comprehensive study of the going concern concept in relation to creditworthiness of economic entities to synthesize two accounting concepts, i.e. the dynamic and static balance sheet.
Methods We employ general scientific principles and research methods, namely, a historical approach, analysis and synthesis, induction and deduction, grouping, comparison, abstraction, generalization, and analogy.
Results The paper proves the hypothesis that entity’s creditworthiness is a complex accounting and analytical characteristic reflecting the continuity of operations. If the entity does not ensure its creditworthiness, there exists a threat to its going concern. The lack of financial solvency leads to bankruptcy, and the economic entity may cease its operations.
Conclusions The existing contradictions in the going concern and creditworthiness assessment appeared in the 19th century. We suggest that the development of the theory and practice of accounting and economic analysis should now move towards the synthesis of accounting concepts of dynamic and static balance sheet through integrated reporting. This will enable to create information basis to reveal and prevent threats to going concern by assessment of creditworthiness and solvency of entities.

Keywords: business continuity management, BCM, going concern, creditworthiness, sustainable development


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