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Chapter 16

Entity reconstructions

3.1 Going concern

The following are indications that an entity may no longer be a going concern:

 lack of cash

 high level of borrowings

 major repayments due in the next 12 months

 large impairment losses

 negative operating cash flows

 large provisions or contingencies relating to legal claims.

If an entity is not a going concern then the financial statements should be prepared
on the break-up basis.

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