Save Rs 588 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Substance over form

Save Share

Join Us Follow Us Add as Source

This query is : Resolved

Report Follow Query Ask a Query

Rama Krishna

Rama Krishna (Querist)
Follow

09 February 2017 Any one plz explain the exact meaning and example of substance over form

CA Amrita Chattopadhyay

CA Amrita Chattopadhyay (Expert)
Follow

09 February 2017 The concept of substance over form is applicable when as per the law, it may appear to be certain type of transaction but when you practically look at it, it may appear to be something else.
For example, as per AS -19 you find that the person is paying rent for certain capital asset for a small period so it appears to be operating lease and thus to be considered as revenue. But it you go through the agreement and read all the clauses carefully, you will find that lessee has all the rights over the asset which gives it a nature of finance lease thus have to be capitalized.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now