• Assessing business viability

    When assessing a business’s viability, we look at its ability to pay its debts and meet its ongoing commitments. Our assessment considers a range of indicators, including:

    • gross margin
    • cash flow
    • asset/liability position (including working capital)
    • liquidity
    • debtor/creditor position
    • availability of funding.

    If you’re asked to demonstrate the viability of the business, you’ll need to provide the following information within an agreed timeframe:

    • a proposal to pay all amounts owed to us in the shortest possible timeframe, while allowing all future tax obligations to be met by their due date
    • details on how the debt arose
    • steps taken to mitigate the debt (for example, loan applications)
    • the most recent statement for each bank or financial institution account held
    • the following documents for the year to date and the two preceding financial years    
      • detailed profit and loss statement or statement of financial performance
      • detailed balance sheet or statement of financial position
    • details of any overdraft or loan facilities, including term loans, hire purchase and leasing facilities (include the balances owing, the monthly repayment amount for each debt commitment and the limit for overdrafts)
    • aged creditors listing
    • aged debtors listing
    • any other relevant information that may help us to assess your proposal.

    Get it done

    Send financial documentation with your client’s ABN and company name on all documents to us.

    If you have registered for an AUSkeyExternal Link as a tax professional, you can send the documents using secure mail in the:

    Alternatively, send the documents to us by:

    • fax on 1300 724 793
    • mail to:

    Australian Taxation Office
    PO Box 1129
    Penrith NSW 2740

    End of get it done
  • Last modified: 19 Sep 2014QC 22490