Why ‘going’, in “going concern”?
This quote explains that in “going concern”, ‘going’ means ‘ongoing’.
But it is weird to describe a business as ‘going’. Native English speakers refer to "running" or "operating" a business, or that a business is “ongoing, viable”. I never heard anyone refer to ‘going’ a business, or that a business is ‘going’.
Why ‘going’, in “going concern”?
Why's this term not “ongoing concern”, or “operating concern”?
1 answer
No source is given for the quote in the OP. It's not an authoritative definition of the term (nor I aim to provide one here).
To properly understand that quote anyway, focus on the term "viable", which you highlighted, and which has a specific economical meaning, way narrower than just "operating": the operations of the concern are making profit (or at least not resulting in a significant or repeated net loss); it appears likely that it will be possible to keep the concern profitable at a similar scale for at least the next year; and there is a business intention to essentially continue operations for at least that long. These assumptions matter especially when selling the company, or, more generally, when appraising it: is the concern a live economical organism, or is it already on its path to liquidation? Is its last balance sheet likely representative of the next one? Does the company's value exceed the value that could be extracted by shutting it down and selling out its buildings, brands, etc., individually?
Given that the term was composed in early 19th century, you'd need to ask some native English speakers from that era about whether the term sounded weird to them at the time, rather than your own contemporaries.
An early occurrence (in a newspaper ad) read as follows: "The Bottle Manufactory is a going concern which would be a great advantage to a purchaser, in the view of continuing the business." This example, like most of the oldest known examples, is from Scotland, and it obviously doesn't represent any accounting jargon yet: the sentence simply says that the bottle factory is making bottles and on its way to make even more bottles, should its prospective buyer [to whom it is written to appeal] desire to make a lot of money from this factory going on to make bottles. A lot of the 200+ years old language would find subtly modernized expressions if written today, but the phrase "going concern" eventually found favor with accountants, became a rather precise, useful and entrenched bit of jargon, and so it kept the exact same liguistic form and a very similar, just somewhat more precise meaning until today.
For those whose life experience doesn't revolve around accounting and company valuation, it's probably fair to compare this specialized term with a less technical, and therefore more widely used, phrase such as "my business is going well". The meaning of indefinite viability (or at least viability from the last yearly balance sheet to the next one) is somewhat similar between the two, although conveyed through "well" rather than through "going" in this latter example.
1 comment thread
0 comment threads