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“Substance over form in accounting refers to a concept that transactions recorded in the financial statements and accompanying company disclosures must reflect their economic substance rather than their legal form.”

In other words, if a company sells $1m worth of products and services but receives $100k in commission, it should report $100k instead of $1m in income.

I was privileged to record two podcast episodes titled “Substance Over Form”. The thing that started my thought process was during the recent Lunar New Year when I pondered over traditions and practices.

During the festive period, we do various things like have new clothes, give red packets, exchange oranges and other traditional practices. But, while I enjoy it thoroughly and find it meaningful, I’ve encountered situations where the older generation gets flustered because something was not done.

In this particular situation, one relative of mine concluded that the younger generation did not respect or love her. Despite our explaining that her conclusion was far from the truth, she had a massive reaction.

As I pondered this incident, I realised that we, and I speak for myself, can be very caught up with form over substance. We are impressed with how people dress and what people say, and we can sometimes miss what people do.

We also focus on creating a form to impress our acquaintances and posture ourselves in front of our bosses, hoping for increment and promotion. While form is important, as we never like a curt or impolite person, reality will catch up if we neglect to build substance behind the form. It is said that we will know who has swimming trunks on when the tide is down.

This also happens often in marketing or sales, where I often hear, “I would like to collaborate with you”. I soon discover that this person means, “I want to sell you my product and services”. They would have created more trust if it had been made clear upfront that there is a product or service of value that is beneficial to us.

This makes me think through and encourages my team to focus on building substance over form. I appreciate the power of marketing and presentation.

We are in the business of storytelling, and we should do it well. This should, however, only be done by building substance in our business. Our team is focused on serving our clients well, producing and bringing in the right titles.

Thank you for taking the time to read this.