Change of Accounting Basis

Question 1

Introduction

What is the Default Method for Calculating Taxable Trading Profits?

Answer 1

The Cash Basis.

For Sole Traders and Partnerships

Question 2

Introduction

What Election is Available Regarding an Accounting Basis?

Answer 2

For Profits to be Calculated on an Accruals Basis.

In Accordance to GAAP.

Question 3

Introduction

An Adjustment is Required When Changing Accounting Basis to Ensure:

Answer 3

• All Income is Taxed Once;
• All Expenses are Relieved Once.

Question 4

Leaving Cash Basis

How are SBAs Treated When Leaving Cash Basis of Accounting?

Answer 4

Can Start and Continue to be Claimed in the Remaining 33 and 1/3 Year Period.

Running From the Date the Building is First Brought to Use.