The insolvency forecast should compare all expected incoming payments with payments falling due over an appropriate planning period. It should start with current bank balances, contractual payment dates, wages, taxes, loans, supplier claims and necessary operating expenses. Expected revenue, new financing or asset sales should be included only at realistic amounts and for realistic dates. Several scenarios should be calculated for uncertain assumptions, for example, delayed customer payments, declining revenue or expiring credit facilities. Early warning signs include recurring liquidity shortfalls, deferred payments, terminated financing or growing dependence on unconfirmed cash inflows. Assumptions, data sources and management decisions should be documented on an ongoing basis and updated when new information becomes available. Impending inability to pay is a forward-looking assessment and must be distinguished from an existing inability to pay liabilities as they fall due.
A Company's Impending Inability to Pay Before Insolvency Proceedings in Georgia
Impending inability to pay is a concern when a company in Georgia is still meeting its currently due obligations, but its future liquidity is unlikely to be sufficient to do so. Whether this risk opens access to a particular rehabilitation or insolvency proceeding must be assessed separately against the requirements of that proceeding.
VivAVia can make mistakes. Check important information.