Accounting · Accounting Principles
A specialized financial institution is evaluating its long-term lease agreements for a fleet of high-value aircraft where the legal title remains with the lessor for the entire duration but the lessee enjoys all economic benefits and bears all risks of ownership. The accounting department decides to record the aircraft as an asset on the lessee's balance sheet to ensure a true and fair view of the economic reality. Which fundamental accounting concept is primarily being applied here?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The Business Entity Concept
- 2The Substance Over Form Concept✓
- 3The Money Measurement Concept
- 4The Dual Aspect Concept
Correct answer
The Substance Over Form Concept
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