then chairman of the Senate Finance Committee, proposed a discussion draft on cost recovery and accounting that would also restrict certain individual owners of businesses from using the cash method of accounting
The cash method of accounting
, which records revenue when cash is received and records expenses when cash is paid, is a longstanding accounting method popular among service-based businesses, such as CPA firms.
The question was recently presented to the 1RS whether the application of FASB standards requires consent of the Commissioner as a change in method of accounting
Indeed, the LIFO method is likely the predominant method of accounting
in industries that carry inventories of goods, especially those engaged in manufacturing, mining, wholesaling, retailing, distribution, and energy production.
FASB says approximately 750 public companies in the United States are voluntarily applying the fair value method of accounting
for share-based payments in Statement no.
The regulations also provide, however, that a change in the useful life of depreciable property is not a change in method of accounting
if the useful life of the property is not specifically assigned by the Code, the regulations or other published guidance.
To fall under the provisions of Revenue Procedure 2002-28 for an automatic change to the cash method of accounting
, a taxpayer must be classified as a qualifying small business by meeting several tests:
After receipt of this approval, Evergreen Solar will account for its share of EverQ's financial results under the equity method of accounting
Although neither the Code nor the regulations clearly define the term "method of accounting
," both do provide that a change in method of accounting
involves the change in treatment of any "material item.
The first proposal, Not-for-Profit Organizations: Mergers and Acquisitions, eliminates the use of the pooling-of-interests method of accounting
by not-for-profit organizations and requires the acquisition method for all mergers and acquisitions by a not-for-profit organization.
85-4, Accounting for Purchases of Life Insurance, that adopted the cash surrender method as the only generally accepted method of accounting
for these assets.
Freight-ways (23) is a proper method of accounting
that clearly reflects a taxpayer's income.
The statement requires use of the purchase method of accounting
for all business combinations initiated after June 30, 2001, thereby eliminating use of the pooling-of-interests method.
263A to change their method of accounting
may make this change in accordance with Reg.
began to account for its 30% share of earnings of the Distributor under the equity method of accounting