Substance over form

The doctrine of substance over form is the accounting principle in order to ensure transparency in a financial transaction. If companies, the banking sector, financial creditors, shareholders practice substance over form, it will show real transactions within the legal framework. For example, if person A is investing a fixed amount X every month to a company, then he is very much entitled to see a financial statement where the company is making a profit or in the loss. The major application of this doctrine is to ensure true and real intent of the transaction without misleading the client. There should not be any ill intention or motive and practice of the company in order to lure the clients regarding financial credibility.]