Fourth Directive 78/660/EEC - Principle of a true and fair view - valuation based on historical price - purchase price obviously lower than the actual value
2013
Abstract
The principle that a true and fair view must be given, set out in Article 2(3) to (5) of the Fourth Directive, does not permit the principle of valuation of assets on the basis of their acquisition price or their production cost, contained in Article 32 of that directive, to be departed from in favour of a valuation on the basis of their real value, where the acquisition price or the production cost of those assets is manifestly lower than their real value.A company which is certain to make a large profit due to commitments entered into regarding the future resale of an asset must, under Article 2(4) of that directive, give additional information in that regard.