Transformations  in
Business & Economics

BUSINESS RESTRUCTURING IN LIGHT OF THE GOING CONCERN PRINCIPLE. RESEARCH INSIGHT IN THE SELECTED ENTERPRISES
Angelika Kaczmarczyk

ABSTRACT. The going concern assumption is the fundamental principle of financial reporting. Its adoption determines the method of valuation and presentation of an entity's assets and liabilities. The commencement of bankruptcy proceedings involves the inability to continue as a going concern, whereas opening restructuring proceedings does not. Restructuring proceedings are divided into four types of proceedings: arrangement approval proceedings, accelerated arrangement proceedings, arrangement proceedings, and remedial proceedings. Remedial proceedings are addressed to debtors in the most difficult financial situation and are characterised by the lowest effectiveness. This provides grounds for the question whether remedial proceedings constitute a premise for the declaration of the inability to continue as a going concern. In remedial proceedings, the court revokes the debtor's administration and hence it is unable to declare that it will continue its operations without a material change of their scope. Its influence on the situation of the enterprise is limited. The paper proves that restructuring proceedings should not be treated alike. The conclusions have been drawn on the example of enterprises operating in Poland and Polish regulations.

KEYWORDS:  bankruptcy, liquidation, going concern principle.

JEL classification:  M14, M19, P2.