PROBLEM ASPECTS OF APPLYING THE SUBSTANCE OVER FORM PRINCIPLE

Abstract

The application of the fundamentals of accounting must be done in such a way as to lead to a true and fair view of the financial standing (position) and of the results obtained (performance). The users of the financial statements must be able to interpret them, so they must be based on financial accounting data founded on generally accepted accounting principles. One of the most controversial accounting principles is the priority of content over form, which is characteristic of the Anglo-Saxon accounting system and assumes that, when there are differences between the economic nature of a transaction and its legal form, the entity must record transactions in accounting in view of the economic content of the transactions. In this context, this article examines the problematic aspects of the application in practice of the principle of content priority over form.

Keywords

• principles of accounting
• economic content
• legal form
• assets
• debts
• patrimony
• property