Please Help: Substance over form
Posted Date : 26-Aug-2011 , 11:15:28 am | Posted By Hardik Thakkar
please explain this concept
Category : Accounts | Answers : 3 | Comments : 2 | Hits : 412
Answers
Answer By: CA Manzurhasan J Shaikh
If information is to represent faithfully the transactions or events, it is imp that they are accounted for & presented in accordance with their substance and economic reality and NOT MERELY THEIR LEGAL FORMS.
Answer By: Rohit Agarwal
The accounting treatment and presentation in financial statements of transactions and events should be governed by their substance and not merely by the legal form. A typical example : andha aadmi spects pehnta hai, form.
Lekin agar koi aadmi kaal spects pehna hai to iska matlab who andha hai yeh jaruri nahi hai – this is substance over form.
Matlab jo dikhe who jaruri nahi ki sanhi ho..
Lekin agar koi aadmi kaal spects pehna hai to iska matlab who andha hai yeh jaruri nahi hai – this is substance over form.
Matlab jo dikhe who jaruri nahi ki sanhi ho..
Answer By: Ketan Samdani
nicely explained sirs.
Comments
Adil Siddiqui
26-Aug-2011 , 12:40:52 pmAccording to the principle of substance over form,the real fact of the matter is taken into account not a legal form. e.g. ABC Co. purchased a car and all the risk and rewards are transfer to ABC Co. alongwith car even registration is not done. it means legally ABC Co. ltd is not a legal owner but it has paid for and received a car.
Ashish Karundia
26-Aug-2011 , 01:27:01 pmVery rightly said i.e. one has to see the real fact and not only the legal factor. Further, Hardhik you can understand the same in the more better way if you go through the compendium of AS issued by ICAI.