In accounting and supervisory law, individual rules that are binding (a list of detailed rules that must be followed when preparing financial statements). This always has the disadvantage that such precise instructions create an incentive to be circumvented. – In contrast, principle-based guidelines are guidelines that are based on overriding considerations – such as comprehensibility, materiality, usefulness – and require decisions to be made from this perspective. The credible presentation of a fact is ultimately decisive. – In accounting, U.S. GAAP is more rule-based, IFRS more principle-based. – In the case of supervision in Germany, a sensible mix of both principles is found, based on individual regulatory topics in each case. – See disclosures, disguised, measurability, information overload, plain language, publicity, situational, regulation, consistency, substance-over-form principle, transparency, reliability, appropriateness.
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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
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/