The economic viewpoint is necessary, if there is a conflict between the legal and the economic treatment of circumstances. In international accounting this circumstances are called substance of over form.

The economic content from business transactions or other events does not agree always with, what comes out apparently from its legal organization or circumstances organization. For the illustration relating to the balance of a business transaction they must be balanced and not represented in accordance with their actual economic content and alone in accordance with the legal organization.

As example one can regard a leasing contract between two business partners here. Net assets and/or a fortune article are left by the leasing giver to the lessee for hundred percent use. Legally the leasing giver must activate the article, since he has still the property. If one regards circumstances from the economic side, then the lessee must activate the article he him uses there and from this late yields obtains.

Articles in category "Economic view"

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