Faithful representation is a fundamental characteristic of useful information within the IASB’s Conceptual framework for financial reporting.Which of the following accounting treatments correctly applies the principle of faithful representation?
- AReporting a transaction based on its legal status rather than its economic substance
- BExcluding a subsidiary from consolidation because its activities are not compatible with those of the rest of the group
- CRecording the whole of the net proceeds from the issue of a loan note which is potentially convertible to equity shares as debt (liability)
- DAllocating part of the sales proceeds of a motor vehicle to interest received even though it was sold with 0% (interest free) finance