The Rules of Thoughts

We all know the rules of multiplication of mathematical signs ‘positive’ and ‘negative’. Still, we’ll have a look at those. These are as below.
‘positive’ x ‘positive’ = ‘positive’
‘positive’ x ‘negative’ = ‘negative’
‘negative’ x ‘positive’ = ‘negative’
‘negative’ x ‘negative’ = ‘positive’

One thing we can observe from above is that opposite signs give the negative results whereas same signs give the positive result. Similarly, there are some rules for thoughts also. But these rules are something different.

Before that, let us understand some points about thoughts. Thoughts are the things we feel in our mind. On an average, a human mind gets around 60,000 thoughts in one day. Most of the thoughts are unconscious also. The thought process is mostly out of control. However, we have the capability to control some of our thought, if not all.

Thoughts can be of two types – one which originate within us and one which originate with the input we get from others. Let us name these thoughts as internal thoughts and external thoughts respectively. External thoughts have, in most of the times, potential to influence the internal thoughts. In turn, internal thoughts also have potential to defend external thoughts.

These thoughts are further of two types – positive and negative. It means we have four types of thoughts in all – internal positive, external positive, internal negative, external negative. Internal thoughts are more in abundance than external thoughts. However, the chances of external thoughts influencing the internal thoughts are more.

As discussed above, thoughts also have rules. Let us discuss these rules.

Internal Positive x External Positive:

When internal thoughts are positive and external thoughts are also positive, the result, as like in mathematical signs, is positive.

Internal Negative x External Negative:

When internal thoughts are negative and external thoughts are also negative, the result is not positive. In case of thoughts, negative multiplied by negative is not positive.

Internal Negative x External Positive:

When internal thoughts are negative and external thoughts are positive, the result is still negative.

Internal Positive x External Negative

When internal thoughts are positive and external thoughts are negative, there is a magic and the result is positive.

Now what can we observe from the above? The answer is whenever the internal thoughts are positive, the result is always positive. On the other hand, when internal thoughts are negative, the result is always negative. So, bottom line is positive thoughts should originate from within.

I conclude by giving a thought – One positive thought from within can fight with millions of negative thoughts from outside.

(This write up is restricted to convey the rules with respect to thoughts. However, I shall try to elaborate more on thoughts in upcoming writings.)

CA. Amol G. Kabra
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Substance over Form

The concept of substance over form is very difficult to understand for the students in the initial stage. Owing to initial confusion many students either keep it in option or even if they study, don’t understand it fully. I have made a short attempt to explain this concept in a brief manner.

This phrase contains two words, ‘substance’ and ‘form’. The phrase ‘substance over form’ is a short version of its original meaning “In case of conflict between ‘substance’ and ‘form’ of a transaction, the ‘substance’ of transaction shall prevail over its ‘form’.”

Let us understand the meanings of ‘substance’ and ‘form’ separately.

Substance of a transaction means its actual nature. Whatever is the original nature of transaction is its substance. Form is the way the transaction is recorded or presented. So, basically substance relates to content of transaction whereas form relates to its presentation. It is not always necessary that the substance of a transaction shall differ from its form. In most of the cases, the substance of a transaction and its form are one and the same. However, in select cases, the substance can be different from the form of the transaction.

The concept of ‘substance over form’ may be relevant in three cases viz., accounting, audit, and regulatory assessments. But, it mainly comes under focus either during audit or during regulatory assessments.

Accounting requires that whenever a transaction is recorded or it’s presented in the financial statements of an enterprise, the substance of transaction should prevail over its form. However, in case of accounting, it is not independent of its management or ownership. So there can be bias in avoiding this requirement.

In case of audit, an auditor is under obligation to follow substance over form. So auditors require examining transactions (obviously considering the materiality concept also) so as to check whether the financial statements follow the concept of substance over form.

Also in the case of regulatory assessments, the assessing authorities always go by substance and not by its mere presentation so as to make sure the revenue of their department is not at loss.

Let us understand ‘substance over form’ by small example. X Limited has paid a commission of Rs.1,00,000. to its agent. However, while recording, the company recorded it as Rent. Now what can be the implication of this change in presentation? With respect to net result of the business there shall be no impact as both commission and rent shall be debited to profit and loss account and net profit or loss shall remain unchanged.

But with respect to audit and regulatory point of view, it can make a difference. In case of tax audit, the auditor is required to report on compliance with respect to TDS of the company. Take in the same example, the company has debited the amount to rent instead of commission. If we go by its form, on a rent of Rs.1,00,000 there is no requirement of tax to be deducted u/s 194I. However, if we go by the substance of transaction, i.e., its original nature being commission, tax is required to be deducted @ 10% u/s 194H.

Now, the duty of auditor or regulatory authority is to consider the actual nature of transaction and not merely the form in which it is presented. This consideration of substance of transaction over its form is called as ‘substance over form’.

CA. Amol Gopal Kabra, Latur

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Road to Professionalism – 1: Be a Professional and Look like a Professional.

Having a professional qualification and being a professional is far different. Just qualifying a professional education course does not necessarily give you professionalism. Professionalism is to be learnt in addition to getting the professional degree.

When we understand this word ‘professional’, most of the people have a wrong perception about the word. Many people confuse ‘professional’ with ‘commercial’. Whereas commercial is merely concerned with money, professional is concerned with quality, service and well as monetary terms. So, at first, the perception needs to be cleared.

It is very obvious that we refer the word professional to a person who has got some professional qualification like CA, CS, MBA, Doctor, Engineer, Architect, etc. But the word professionalism means something different. The dictionary meaning of the word professionalism is ‘professional character, spirit or methods’ and another is ‘the standing, practice or methods of a professional, as distinguished from an amateur’. It is quite clear that professionalism involves character, methods, practice and also expertise.

To head towards professionalism from being an amateur, one needs to bear a professional character. Professional character does not mean just to show off like a professional, but a person should possess these qualities. It should be the part of its ‘substance’ and not just ‘form’. Behaving like professional without having it in character is like the wolf wearing the tiger skin. It gets uncovered someday definitely.

Professionalism involves methods to be followed. We may also term it as techniques of professionalism. These techniques may involve proper planning, formation of strategies, delegation of work, handling the people, executing the plans, etc. A professional definitely follows all these techniques to achieve professional success.

Professionalism is not a one day affair. That you behave like a professional for a day and it’s achieved. It requires continuous and consistent practice. It needs to be imparted within a person through practice, practice and practice. And over a period of time this practice gets converted into a professional character.

Professional is a person who is not an amateur, i.e. a beginner. It means that professionalism requires expertise. Expertise is definitely attained through some professional course. But it needs to be maintained. A professional needs to be updated on all aspects of his area of practice. Expertise can be achieved through continuous updation process.

Having these qualities is just a part of being a professional. However, only being a professional is not sufficient, you should also look like a professional. Looking like a professional can mean to include your dressing, grooming up, looks, behavior, etc. However, looking like professional includes much more than having professional attire. It’s not just about attire but it should be about a professional attitude.

So, I briefly conclude the article with the heading – be a professional and also look like a professional.

CA. Amol Gopal Kabra, Latur

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Marks – A real measure of performance or just a record?

Recently, the results of HSC i.e. 12^th Grade have been declared. As usual, there were mixed feelings for the students. Passed students have scored marks as low as 35% to as high as over 98% also. However, if we can see a large number of students are not satisfied with the result. Be it a student scoring 50% or be it a student scoring 95%. The main issue with students is that the marks are below expectations.

Being in a teaching profession, I am closely associated with students. After the results, I got to know the feedback from the students about their results. The main feeling amongst most of the students was ‘disappointment’. The main reasons for disappointment were – 1. Scoring below expectations, 2. Should have prepared more, 3. Some other students more than me, etc. On analyzing these reasons I have something to convey to all the students who have passed out of HSC or shall be appearing next year.

Almost all students, and also their parents, are concerned with marks only. Everything in the career achievement process of a student is measured in terms of marks only. I have seen teachers discriminating the students on the basis of marks. But one question I need to ask that whether marks are the only criteria to judge a student’s worth? The answer is NO. It’s definitely not. But still students are being judged and graded on the basis of marks only.

No doubt, scoring good marks is an achievement while pursuing your academic goal. But what I mean to convey is that it is not the only criterion. I have seen students scoring top marks in exams but having less regards to common sense and vice versa. Scoring good marks need not always bring you wisdom. Then why to get disappointed about marks after the results?

I have experienced in life that all these marks and scores are a matter of a month after the result. If you get good marks, people will cherish for a month, if not the will blame for a month. They won’t pay heed after that. So what I mean exactly that your marks, whether good or bad, just remain as a record in the file of your academic accomplishments. So, if you want to score good marks, prepare and perform for it, but once the result is out there is no scope for ifs and buts.

Have a lot to say in this topic, but if I continue, this article may get lengthier. May be I’ll discuss other aspects in upcoming posts.

Heartiest congratulations to all the students for their success in HSC exams. Also, my advice is look forward and pursue your further education with full of confidence and determination.

All the best.

CA. Amol G. Kabra, Latur.

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