Commentary

B2.501 General principles

Business tax
Business tax | Commentary

B2.501 General principles

Business tax | Commentary

Division B2.5     Recognition of receipts and expenses in periods of account

For updates affecting this Division please see Part B0 Updates

Period in which receipt assessable or deduction allowable

B2.501 General principles

It is important that the receipts and expenses of a trade are allocated to the correct accounting period so that trading profits (or trading losses) for that period can be calculated accurately. The tax legislation requires trading profits to be calculated in accordance with generally accepted accounting practice (GAAP), subject to any adjustment required or authorised by law1. In the context of calculating profits of the trade, references to receipts and expenses are to those amounts which are posted to the profit and loss account as credits or debits2.

This does not necessarily mean that these amounts have actually

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