Substance over form is an accounting concept which means that the economic substance of transactions and events must be recorded in the financial statements rather than just their legal form in order to present a true and fair view of the affairs of the entity.
The key point of the concept is that a transaction should not be recorded in such a manner as to hide the true intent of the transaction, which would mislead the readers of a company's financial statements.
The accounting concept was raised in a conversation where the issue of the proposed change in the form of our government toward becoming parliamentary. The comment was based on the opinion that even when we change the form of our government but maintain the same majority of political leaders whose values, character and ethics have not made the current government “successful” the change would not be useful.
This opinion used the subject concept from the perspective of one of life's most important personal growth experiences is discovering the difference between form and substance. The difference? Form is the "outer" self, substance is the "inner" self.
In an article written by Peter Vadja in Management Issues, he writes “our need for form grows less as our substance - our real, true and authentic self – starts to take precedence. What's "outside" doesn't seem to carry as much weight. The trappings of life become less and less significant. They lose their illusionary importance. With a new sense of lightness and freedom, we go through life directed from the inside out – from a place of substance. As we mature, the substance of our very being become more important than our form. Hopefully, this applies with our government. In my opinion, the substance of the Filipino needs to be addressed first to make our government work rather than the other way around.
In a related note, we should be prepared to pay the “tuition fee” and absorb the related repercussions with the change in the form of our government. How much will the proposed shift to federalism cost? Estimates by experts vary, but they all agree on one thing: It will be huge. The creation of a federal government will cost some P55 billion that would have “to come from the pockets of taxpayers,” Dr. Rosario Manasan of the Philippine Institute for Development Studies told a recent Senate hearing on the issue. We look forward to the decision our nation has to make and live with.
Let us end with an anecdote that encourages us to consider the issue of substance versus form. The accountant reads the story of Cinderella to his four-year-old daughter for the first time. The little girl was fascinated by the story, especially the part where the pumpkin turns into a golden coach. Suddenly she speaks up, "Daddy, when the pumpkin turned into a golden coach, would that be classed as income or a long-term capital gain.
