The concept of substance over form influences the classification of obligations expected to be refinanced.

Question

Quizplus · Accepted Answer

The concept of substance over form focuses on the economic essence of a transaction rather than its legal form. It is used to determine the proper accounting treatment of transactions. In the case of obligations expected to be refinanced, the substance of the obligation, including the likelihood of refinancing and the terms of the refinancing, should be considered when determining its classification under accounting standards. Therefore, the concept of substance over form influences the classification of obligations expected to be refinanced.

The Concept of Substance Over Form Influences the Classification of Obligations