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Auditors' decision-making process to issue a going concern opinion can be characterized as a two-stage process in which the auditor recognizes that a client firm faces bankruptcy risks, and the auditor uses subsequent information cues to determine whether to issue a going concern qualification (Mutchler 1985).
There is though, another group of studies which analyse bankruptcy risks from an "economic" perspective according to which the companies were grouped into failing companies (represented by companies with low financial and economic performance) and non-bankrupt companies (represented by companies that have different performance indicators considered to be high).
A company is typically known as a ' going concern' if it has sufficient resources to continue to operate indefinitely and to avoid any potential bankruptcy risks.
If LDK goes bankrupt, it will indicate significant bankruptcy risks for other Chinese solar companies and could significantly shake investors' confidence in Chinese solar companies," Gordon Johnson, analyst with Axiom Capital Management, said in a note to investors.
To anticipate supplier bankruptcy risks, they also do a great deal of dual sourcing and supplier negotiations.
A buyer that engages in a purchase of assets with a distressed company outside of bankruptcy risks that creditors in a subsequent bankruptcy will claim that the amount paid for the assets was too low.
Also to consider: All amounts previously deferred are immediately taxable unless subject to a substantial risk of forfeiture; executives pay an additional 20% tax on deferred compensation if they fail to comply with the role; and they might not collect on the compensation because the 12-month/5-year rule magnifies their exposure to a change in company control, cash flow and bankruptcy risks.
However, Teikoku Databank warned many small and midsize firms, hounded by slumping revenues and debts, still face bankruptcy risks, as foreign economies that have been destinations for Japanese exports are slowing, with the yen's strength undercutting exporters.
The key to an asset securitization is removing the receivables from the bankruptcy risks of the originator by selling the receivables in a "true sale" to an entity that is "bankruptcy remote".
Financial leverage and bankruptcy risks are cornerstones of financial theory (Altman, 1983; Gordon, 1971; Stiglitz, 1972).
what bankruptcy risks are raised or reduced by entering into the workout.
airlines enter the fall with growing expectations that still-tentative signs of stabilization in revenue trends over the last several weeks may pave the way for modest improvement in credit fundamentals and reduced bankruptcy risks moving into 2010.