'Fortbestehensprognose'

At least when preparing the year end closing documentation, the entrepreneur has to check whether or not a continuation of the business is secured. If this is not the case, the going concern premise is not valid and valuation has to happen at liquidation values.

In case there are indications, that a continuation of the business might not be given, or in case the operations will be continued, but one of the following situations prevails, the management / the entrepreneur have to prepare a 'continuation prognosis':

• Negative equity shown in the year end closing (even if only in a draft).
• Loss of 50% of the nominal capital, the results of the company have to be sustainably negative.
• There is a Situation of Crisis, which will lead to a further deterioration of the company’s situation which will probably result in a negative equity in the next year of business.

With the decision ‘Leitentscheidung SZ 59 / 2161‘, the OGH has recorded that indebtedness is no static condition, but a dynamic situation. Consequently the focus must be set on the forecasted development of the company.

Thus, such a continuation prognosis is one possibility to evade the state of indebtedness in the sense of insolvency laws. In case a positive continuation prognosis is submitted in time, the accusation of a culpable protraction of bankruptcy can be refuted and consequences according to civil and criminal laws for the management are evited.

ARION can offer broad assistance to the management when a continuation prognosis needs to be prepared.