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Substance over Form

Others 737 views 5 replies

What is the concept of substance over form?

Plz give a suitable example.

Replies (5)

substance over form means that filling a form is not important, formalities are not important, the most important thing is how to disclose imp.events

for eg. agar in insurance co. cashier apne use ke liye co. se cash le raha hai for invt. to is fraud ko disclose karna jaroori hai

means substance is most important than filling form

If the information represents faithfully the transaction or events. It is essential that they are recorded and presented in accordance with their substance and economic reality not mere their legal form 
 

for example if rights and interests of a property stands transferred but legal documents are yet to be completed, transaction should be recorded as sale  

substance over form mean that u should look into real size of transaction rather then just it legal recording in the books of accounts.

for ex. if u have a penalty of Rs.50(even Rs.50) That should be disclosed in the balance sheet seperately in the profit and loss accounts, even it is not material for u and u r liable to show them


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