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THE PROBLEM OF PRESERVING THE PRINCIPLE OF TRUE AND FAIR VIEW ON EXAMPLES
Abstract
The true and fair view principle is a key rule that has been functioning in accountancy for a very long time. In the face of an ever-growing world and new opportunities that have forced development and changes in the approach of accounting, the true and fair view principle became even more crucial. Its maintenance has become one of the prime goals for each person creating a financial statement. The theoretical part of the article was focused on showing the meaning of the true and fair view principle and its importance in accountancy. Different examples of the definition were shown. The position of the Polish Chamber of Statutory Auditors and the provisions of EU directives regarding the observance of the true and fair view principle were presented. Particular attention was devoted to the regulation inserted in Directive 2013/34/UE allowing departure from the application of the provisions of the Act to maintain the principle of the true and fair view principle. The empirical part of the article was based on the presentation of various accounting cases which pose a challenge for individuals who want to properly present the financial image of their company: the problem of recognition of depreciation of investment properties in the light of the Polish Accounting Act, situation allowing for the abandonment of the applicable regulations in order to maintain a true and fair view, and various approaches to a similar event which, due to other circumstances, requires a different presentation. The examples were confronted with the need to maintain the true and fair view principle. In result, schemes of procedure in connection to atypical situations were presented. Based on the examples, it was concluded that keeping accounting in accordance to the true and fair view principle is difficult and requires a lot of knowledge, skills and an individual approach to specific economic events.
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