What is the concept of substance over form?
Plz give a suitable example.
5 Replies
Payal Gupta
(article assistant)
(176 Points)
Replied 31 March 2010
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
Payal Gupta
(article assistant)
(176 Points)
Replied 01 April 2010
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
Payal Gupta
(article assistant)
(176 Points)
Replied 02 April 2010
means substance is most important than filling form
(Guest)
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
VINEET
(learner)
(53 Points)
Replied 14 April 2010
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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