The assumption that an entity will continue to operate for the foreseeable future is called going concern. It is one of the fundamental assumptions underlying generally accepted accounting standards (GAAP).
The going concern assumption is a fundamental accounting principle that states a company's financial stability is sufficient to keep it in business in the long run, or at least beyond the next fiscal quarter. When potential lenders or investors review the company's financial accounts, the going concern assumption might provide insight into the business. If they believe the company will go bankrupt or otherwise fail over the next 12 months, they may be less eager to lend or invest money in the company.
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