Substance Over Form Concept Example - Definition - Meaning - Explanation - Importance
Here we study about Substance Over Form Concept with Example, which is very important Accounting Concept . Substance Over Form Concept Definition And Meaning All the events should be recorded and analyzed on the basis of their substance and economic benefits and not merely on the legal form or ownership. This co ncepts emphasizes that i n a Busi ness Tra nsactio n, we take i nto accou nt two aspects (i) Legal Form which mea ns Ow nership of Property or Asset (ii) Substa nce Form which mea ns Eco nomic Be nefits, Rights A nd Risks associated with the Property or Asset. Where o nly Ow nership of a n asset is tra nsferred to other party but be nefit associated with that asset are not tra nsferred, the n eco nomic be nefits are preferable over legal form. For Example, if an entrepreneur disposes of the an Asset to other person and transfers the ownership of asset but the future economic benefits associated with t...