Title: Evolution of the substance over form principle in the Italian GAAP from a comparative and international perspective

Authors: Francesco De Luca; Daniela Di Berardino

Addresses: Department of Business Administration and Management, University 'G. d'Annunzio' of Chieti-Pescara, Viale Pindaro 42, 65127 Pescara, Italy ' Department of Business Administration and Management, University 'G. d'Annunzio' of Chieti-Pescara, Viale Pindaro 42, 65127 Pescara, Italy

Abstract: The informative power of financial reports is unanimously based, among others, on substance over form principle. But this principle is not free of ambiguous interpretation and adoption. In fact, it has been differently issued in the US GAAP, in the IAS/IFRS framework and in the Italian GAAP. This paper aims to provide a deep review of the recent reforms of Italian accounting regulation which introduced in 2003 and reaffirmed in 2015 the substance over form as an accounting principle within the law at the same level of accrual basis, prudence and going concern. We adopt a comparative approach to show how US GAAP, IFRS, UK GAAP already include substance over form principle and that the inclusion of this principle within the Italian law did not achieve its initial purpose. This is mainly due to the traditional legal view of a financial report intended by Italian legislator as a legal claim. Further research should be addressed in order to provide also empirical evidence of this mismatch.

Keywords: substance over form; Italian GAAP; Italian accounting regulation reforms; IAS/IFRS framework; UK GAAP; US GAAP; critical accounting.

DOI: 10.1504/IJCA.2017.089381

International Journal of Critical Accounting, 2017 Vol.9 No.4, pp.312 - 328

Published online: 22 Jan 2018 *

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