The Decline of Substance over Form in Accounting

Fischer Dov (), Ellman Ortal and Schochet Sholom
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Fischer Dov: Brooklyn College, Brooklyn, NY, USA
Ellman Ortal: EY, New York, NY, USA
Schochet Sholom: Brooklyn College, Brooklyn, NY, USA

Accounting, Economics, and Law: A Convivium, 2023, vol. 13, issue 3, 373-390

Abstract: “Substance over form” is a traditional accounting maxim that has also influenced legal thinking and has its roots in classical philosophy. “Substance over form” states that accountants do not record transactions based on the outward form of the transaction but discern its economic substance and report accordingly. Nevertheless, “substance over form” has been deemphasized by the FASB’s conceptual framework in recent decades, to the point that an internal debate now rages over whether accountants and auditors have a right and responsibility to put substance over form. FASB must therefore make its position clear on where it stands in this debate.

Keywords: substance over form; faithful representation; conceptual framework (search for similar items in EconPapers)
JEL-codes: M40 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/ael-2019-0052

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