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bei wirtschaftlicher Betrachtung

English translation: applying the substance-over-form principle

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GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
German term or phrase:bei wirtschaftlicher Betrachtung
English translation:applying the substance-over-form principle
Entered by: Beate Lutzebaeck
Options:
- Contribute to this entry
- Include in personal glossary

18:44 Apr 2, 2002
German to English translations [PRO]
Bus/Financial - Accounting
German term or phrase: bei wirtschaftlicher Betrachtung
context: auditor's report for annual accounts 2001

"Bei der Beurteilung der Ertragslage des Unternehmens ist zu beachten, daß in Sachen X ein Forderungsverzicht der ABC-Bank erst im Geschäftsjahr 2002 erfolgswirksam wird, da die Bank hinsichtlich eines Teilbetrages von 4.023 TDM zunächst nur einen Rangrücktritt zugestanden hat.

Bei wirtschaftlicher Betrachtung ist daher das ausgewiesene Ergebnis wie folgt zu korrigieren:

Jahresfehltbetrag 2001 2.398 TDM
aufschiebend bedingter Forderungsverzicht der ABC-Bank 4.023 TDM
wirtschaftliches Ergebnis 2001 1.625 TDM

I think perhaps "bei wirtschaftlicher Betrachtung" in this context refers to the (accounting) principle of conservatism.

Could someone confirm?
Beth Kantus
United States
Local time: 15:57
substance over form
Explanation:
I don't think that the "substance over form" principle has anything to do with the accounting principle of conservatism or prudence, but rather with economic ownership, i.e. recognition is based on who is the economic owner of an assets (substance), rather than on who is the legal owner or owner in name (form).

When you google for "substance over form" in German, you get numerous hits from German sites (KPMG and other auditing firms) using "wirtschaftliche Betrachtungsweise" with "substance over form" in brackets, and vice versa.

See for example:
"The thesis deals with the legal consequences - referring to the Austrian
banking law (BWG) – of including leasing companies in a (consolidated)
banking group. The author analyzes whether different concepts of economic
ownership (substance over form principle) result in putting leased assets on the balance sheet in individual accounts (under Austrian-GAAP resp. law) while treating the same lease contracts as loan agreements (receivables) in consolidated accounts under § 59 (6) BWG."

"Die (Doktor-)Arbeit würdigt die Rechtsfolgen, die aus der Einbeziehung von Leasinggesellschaften in den Konzernabschluss von Kreditinstitutsgruppen
resultieren. Insbesondere geht der Autor der Frage nach, ob eine sachliche
Rechtfertigung für die abweichende bilanzielle Darstellung von
Finanzierungsleasingverträgen im handels- bzw. bankwesenrechtlichen
Einzelabschluss gegenüber dem bankwesenrechtlichen Konzernabschluss
besteht. Obwohl beide Abschlüsse dem Konzept der/des wirtschaftlichen
Betrachtungsweise/Eigentums folgen, wird das Leasinggut im
Einzelabschluss idR beim Leasinggeber bilanziert, im bankrechtlichen
Konzernabschluss unterliegt die Leasingbilanzierung hingegen § 59 Abs 6
BWG, womit das Leasingverhältnis entsprechend einem Kreditverhältnis
abgebildet wird."

"... substance over form. wirtschaftliche Betrachtungsweise. Der Inhalt und nicht die
Erscheinungsform ist für die bilanzielle Beurteilung entscheidend."

This translation is also backed by Woywode, Tax and Accounting Dico, which also offers "economic point of view" - this is, however, not the correct translation in this context.

--------------------------------------------------
Note added at 2002-04-02 22:18:32 (GMT)
--------------------------------------------------

\"Substance over form\" is usually fit into sentence structures by just saying \"in substance\" => \"In substance, the net income reported must be corrected [amended] as follows:\" Alternatively, \"Applying the substance-over-form principle, the net income reported must be corrected [amended] as follows:\" would also work.
Selected response from:

Beate Lutzebaeck
New Zealand
Local time: 07:57
Grading comment
Looks like I was completely off track with this one - thanks very much for your help.
4 KudoZ points were awarded for this answer

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Summary of answers provided
5 +4from the economic point of view
Codrut Tudor
4 +2from a business/management perspectiveMichael Sebold
5viewed from an economic standpoint
Dr. Fred Thomson
4substance over formBeate Lutzebaeck


  

Answers


14 mins   confidence: Answerer confidence 5/5 peer agreement (net): +4
from the economic point of view


Explanation:
From the economic point of view; or economically speaking; as far as the economic side is concerned

Codrut Tudor
Romania
Local time: 22:57
Works in field
Native speaker of: Native in RomanianRomanian

Peer comments on this answer (and responses from the answerer)
agree  Regina Landeck
4 mins

agree  Alexander Schleber
20 mins

neutral  Werner George Patels, M.A., C.Tran.(ATIO): ...from AN economic point of view .... (indefinite article is mandatory here!)
28 mins

agree  Palmyra: and agree with the article "an"
1 hr

agree  Martina Ley
1 hr
Login to enter a peer comment (or grade)

22 mins   confidence: Answerer confidence 5/5
viewed from an economic standpoint


Explanation:
considered from (or looked at from) the standpoint of economics
on an economic basis

Dr. Fred Thomson
United States
Local time: 13:57
Native speaker of: English
PRO pts in category: 37
Login to enter a peer comment (or grade)

27 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +2
from a business/management perspective


Explanation:
They are framing the situation in terms of its impact on the business.



--------------------------------------------------
Note added at 2002-04-02 19:45:23 (GMT)
--------------------------------------------------

Here are some links for usage:

From a business perspective, on a combined basis, DTCC raised $771 million in revenue in 1999, up 16%. We returned a record refund of $106 million and $46 million to customers of the clearing corporation and depository, respectively. In addition, we reduced certain discountable fees by $31 million, the sixth year that fees have been reduced.
http://www.dtcc.com/1999annual/letter.html

From a business perspective, revenues and gross profit in the division came in well above projections, even as contracting shifted to IQCs for all but one major award.
http://www.chemonics.com/aboutus/2000AR/tech_achievements.ht...

From a business perspective, we will then be able to determine any remaining costs and we intend to provide for these in Q4 so that in our new fiscal year, as of October 1, 1999, we\'ll no longer be impacted.
http://www.sierrasystems.com/invest/conf_calls/q3_99_transcr...


Michael Sebold
Canada
Local time: 15:57

Peer comments on this answer (and responses from the answerer)
agree  Wiebke Herbig
13 mins
  -> Thanks, Wiebke.

agree  Theo Bose: agree
21 mins
  -> Thanks, Theo.
Login to enter a peer comment (or grade)

2 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5
substance over form


Explanation:
I don't think that the "substance over form" principle has anything to do with the accounting principle of conservatism or prudence, but rather with economic ownership, i.e. recognition is based on who is the economic owner of an assets (substance), rather than on who is the legal owner or owner in name (form).

When you google for "substance over form" in German, you get numerous hits from German sites (KPMG and other auditing firms) using "wirtschaftliche Betrachtungsweise" with "substance over form" in brackets, and vice versa.

See for example:
"The thesis deals with the legal consequences - referring to the Austrian
banking law (BWG) – of including leasing companies in a (consolidated)
banking group. The author analyzes whether different concepts of economic
ownership (substance over form principle) result in putting leased assets on the balance sheet in individual accounts (under Austrian-GAAP resp. law) while treating the same lease contracts as loan agreements (receivables) in consolidated accounts under § 59 (6) BWG."

"Die (Doktor-)Arbeit würdigt die Rechtsfolgen, die aus der Einbeziehung von Leasinggesellschaften in den Konzernabschluss von Kreditinstitutsgruppen
resultieren. Insbesondere geht der Autor der Frage nach, ob eine sachliche
Rechtfertigung für die abweichende bilanzielle Darstellung von
Finanzierungsleasingverträgen im handels- bzw. bankwesenrechtlichen
Einzelabschluss gegenüber dem bankwesenrechtlichen Konzernabschluss
besteht. Obwohl beide Abschlüsse dem Konzept der/des wirtschaftlichen
Betrachtungsweise/Eigentums folgen, wird das Leasinggut im
Einzelabschluss idR beim Leasinggeber bilanziert, im bankrechtlichen
Konzernabschluss unterliegt die Leasingbilanzierung hingegen § 59 Abs 6
BWG, womit das Leasingverhältnis entsprechend einem Kreditverhältnis
abgebildet wird."

"... substance over form. wirtschaftliche Betrachtungsweise. Der Inhalt und nicht die
Erscheinungsform ist für die bilanzielle Beurteilung entscheidend."

This translation is also backed by Woywode, Tax and Accounting Dico, which also offers "economic point of view" - this is, however, not the correct translation in this context.

--------------------------------------------------
Note added at 2002-04-02 22:18:32 (GMT)
--------------------------------------------------

\"Substance over form\" is usually fit into sentence structures by just saying \"in substance\" => \"In substance, the net income reported must be corrected [amended] as follows:\" Alternatively, \"Applying the substance-over-form principle, the net income reported must be corrected [amended] as follows:\" would also work.


    Reference: http://www.arcs.ac.at/DissDB/diss/UW/SW/trn100061
    Reference: http://www.unet.univie.ac.at
Beate Lutzebaeck
New Zealand
Local time: 07:57
Works in field
Native speaker of: Native in GermanGerman, Native in EnglishEnglish
PRO pts in category: 27
Grading comment
Looks like I was completely off track with this one - thanks very much for your help.
Login to enter a peer comment (or grade)




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Changes made by editors
Jan 4, 2006 - Changes made by Steffen Walter:
Field (specific)(none) » Accounting


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