Substance over form
Please explain the concept of substance over form with an example
It means looking at the economic / financial reality of the transaction or an event over the legal form of the transaction. Example: Payment for sale of goods in installments. By contract, parties may agree sale will be complete only on the payment of last installment. This is the legal form. But in reality sale has already happened, goods & risk is transferred to buyer. Hence, it is said substance should be preferred and accordingly sale should be recorded immediately.