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The true and fair view and the ‘fair presentation’ override of IAS 1

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  • Lisa Evans

Abstract

This paper examines the ‘fair presentation’ requirement and the override in International Accounting Standard 1. The paper's objective is to attempt an explication of the nature, role and status of the override and to make recommendations regarding its application. The author examines the wording of the relevant provisions in IAS 1 and compares and contrasts these with other regulation containing similar concepts, such as the European Union's fourth directive, UK and German law and US regulation. The ensuing discussion is centred around three interrelated themes: the hierarchies of (legal) rules in different legal systems, the relationship of ‘fair presentation’ to IASC/B pronouncements and the status of the override in IAS 1. It is argued that the override is considerably weaker than the true and fair view override in the EU's fourth directive and the UK's Companies Act, and that its role is not likely to go beyond that of a legal residual clause. The paper finally provides some initial evidence that the override is likely to be interpreted in this way in at least some countries, and recommends that a wider interpretation should not be sanctioned by the International Accounting Standards Board, nor by those charged with the enforcement of International Accounting Standards.

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  • Lisa Evans, 2003. "The true and fair view and the ‘fair presentation’ override of IAS 1," Accounting and Business Research, Taylor & Francis Journals, vol. 33(4), pages 311-325.
    • Handle: RePEc:taf:acctbr:v:33:y:2003:i:4:p:311-325
    DOI: 10.1080/00014788.2003.9729656
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    References listed on IDEAS

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    1. K. Van Hulle & K. U. Leuven, 1993. "Truth and untruth about true and fair: a commentary on 'A European true and fair view' comment," European Accounting Review, Taylor & Francis Journals, vol. 2(1), pages 99-104.
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    13. Christopher Nobes, 2000. "Is true and fair of over-riding importance?: a comment on Alexander's benchmark," Accounting and Business Research, Taylor & Francis Journals, vol. 30(4), pages 307-312.
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