Publication Date
1988
Recommended Citation
Ryan, J. B., A True and Fair View: A Revised "Accounting Interpretation", School of Accounting & Finance, University of Wollongong, Working Paper 1, 1988.
https://ro.uow.edu.au/accfinwp/134
Abstract
The purpose of this article is to provide an Interpretation of the 'true and fair' view" statutory standard that is consistent with recent developments in accounting theory emphasising the central role of relevance and reliability, both accepted today as key concepts in explaining accounting measurements in external financial reporting. The interpretation advocated equates fairness with relevance together with appropriate discIosure and true with correspondence of two kinds. both of which are necessary for accounting information to be reIiable. EmpiricaI correspondence refers to a one-to-one relationship, or correspondence between the measurements of assets and liabilities reported in financial statements and the actual quantity they purport to measure. Secondly, these measurements should be consistent with or correspond to the specific concepts of capital and profit being measured in a particular set of accounts; i.e., the measurements should be internally consistent and deductively valid in relation to the interpretation of the accounting system being applied. The application of this interpretation requires the identification of users and their financial information needs, and the selection of an appropriate reporting model or models.