Aoa! I've opted Accountancy & Auditing for CE-2016. I need a bit help in understanding topics.

"Fundamental Accounting Principles, Concepts, Assumptions and Conventions: Nature and Scope of Accounting, Accrual/Matching Concept, Consistency of Presentation and Comparability, True and Fair View, Neutrality, Materiality, Prudence, Completeness, Understandability and Usefulness, Going Concern, and Substance over Form"

In this I'm unable to understand what is meant by the concept of "Neutrality" & "Substance over form"............. I've started prep from Accounting by Sohail Afzal.......... In first chapter I've not seen these two concepts. Someone please tell what is meant by these two concepts?

Thanks in anticipation. Looking for your replies soon!

Substance over form is an accounting principle used "to ensure that financial statements give a complete, relevant, and accurate picture of transactions and events". If an entity practices the 'substance over form' concept, then the financial statements will show the overall financial reality of the entity (economic substance), rather than the legal form of transactions (form).[1] In accounting for business transactions and other events, the measurement and reporting is for the economic impact of an event, instead of its legal form. Substance over form is critical for reliable financial reporting. It is particularly relevant in cases of revenue recognition, sale and purchase agreements, etc. 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.

Examples
A lease might not transfer ownership of the leased property to the leasee. In some circumstances, the lessee might nevertheless be required to record the leased item as an asset if the lessee intends to use the asset for a major portion of its useful life, or where the present value of the future lease payments is nearly equal to the fair value of the asset. Although the lessee is not the owner, the lessee may be required to record the asset as being owned by the lessee based on the underlying economic reality.

Another example is the situation where a company short of cash sells its machinery to the bank and then leases the same property from the bank. This arrangement is called "sale and leaseback". Although the legal ownership has been transferred to the bank, the underlying economic reality for the company remain the same. Under the substance-over-form principle, the sale and subsequent leaseback are considered one transaction.

Similarly, if two companies swap their inventories, then they will not be allowed to record sales because in substance no sales have occurred, even if they have entered into valid enforceable contracts.

Neutrality
Information contained in the financial statements must be free from bias. It should reflect a balanced view of the affairs of the company without attempting to present them in a favored light. Information may be deliberately biased or systematically biased.
Deliberate bias

Deliberate bias: Occurs where circumstances and conditions cause management to intentionally misstate the financial statements.

Examples:

Managers of a company are provided bonus on the basis of reported profit. This might tempt management to adopt accounting policies that result in higher profits rather than those that better reflect the company's performance inline with GAAP.
A company is facing serious liquidity problems. Management may decide to window dress the financial statements in a manner that improves the company's current ratios in order to hide the gravity of the situation.
A company is facing litigation. Although reasonable estimate of the amount of possible settlement could be made, management decides to discloses its inability to measure the potential liability with sufficient reliability.

Systematic bias

Systematic bias: Occurs where accounting systems have developed an inherent tendency of favoring one outcome over the other over time.

Examples:

Accounting policies within an organization may be overly prudent because of cultural influence of an over cautious leadership.

Well Take help from CA books , you will came to know the Reality of everything ... otherwise at least do read Mukherjee or M A Ghani book ...

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Rabbana zalamna anfusana wa in-lam taghfir lana wa-tarhamna la-naku-nanna mina-al-khasireen

Which chapters are necessary to prepare according to new syllabus for numerical problem in financial accounting .. i m preparing 1) partnership (admission, retirement and death) 2) Depreciation 3) Final accounts complete 4) ratio analysis 5) Cash flow 6) non-trading........ are these enough..???

They are properly described in Conceptual Framework of IFRSs.