(i) Substance Over Form:
The concept of substance over form requires that transactions and other events are accounted for and presented in accordance with their economic reality rather than merely their legal form. This principle ensures that the financial statements reflect the true nature of a transaction, providing a faithful representation of the entity’s financial position and performance. For example, in a lease transaction, if the lessee has substantially all the risks and rewards of ownership, the asset and liability must be recognized in the financial statements, despite the legal ownership remaining with the lessor.

(ii) Going Concern Assumption:
The going concern assumption is the principle that assumes an entity will continue to operate for the foreseeable future without the intention or necessity of liquidation or significantly reducing the scale of its operations. This assumption is vital as it underpins the preparation of financial statements, allowing assets to be recorded based on their expected future benefits rather than their liquidation values. If there are indications that the entity may not be able to continue as a going concern (e.g., financial difficulties or a significant loss of key customers), this must be disclosed, and the financial statements may need to be prepared on a different basis.