Fair presentation (faithful representation)

Under both IAS/IFRS and U.S. GAAP, the fair presentation principle is the overriding accounting principle rather than the conservatism principle. However, the importance of this principle differs under IAS/IFRS and US GAAP. While it is a so-called “overriding principle” according to US GAAP, which means that individual regulations can – or perhaps even must – be deviated from in order to improve the information value of the financial statement, IAS/IFRS do not include such an interpretation. The principle is only to be applied in extremely rare circumstances. Otherwise, it is assumed that the downstream principles and the individual regulations, when applied sufficiently, will result in a presentation in the financial statements that satisfies the requirement for a credible presentation. – See disclosures, disguised, measurability, edition requirement, fair value, IAS 39, information overload, plain text, free text, nothing, balance sheet, pension obligations,
Publicity, situational, rule-based, consistency, substance-over-form principle, transparency, understandability, forecasts, prudence principle, materiality, reliability, fitness for purpose. – Cf. 2006 Annual Report of BaFin, p. 55 f. (material supervisory concerns about the FASB principle of credible presentation).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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