The revenue procedures both amend existing accounting method
change procedures in Rev.
964 provide guidance for a foreign corporation's adoption of accounting methods
for purposes of determining E&P.
When a corporation changes accounting methods
, adjustments must be made to ensure that the change does not result in the omission or duplication of income or expense (Sec.
Taxpayers have some latitude when choosing an accounting method
as long as the method clearly reflects income.
Statements in this news release expressing or indicating the beliefs and expectations of management regarding future performance are forward-looking statements including, without limitation, lease accounting methods
, expected financial restatements, future earnings release dates, and any other plans, objectives, expectations and intentions contained in this release that are not historical facts.
If the taxpayer cannot demonstrate reasonable cause for failure to satisfy the above requirements, the computation of E&P should be made as if no elections had been made and any otherwise permissible accounting methods
not requiring an election had been adopted.
In addition, the ruling required taxpayers that had followed the now incorrect interpretation of revenue ruling 76-28 to change their accounting method
to follow revenue ruling 90-10.
In many respects, issuing public guidance on involuntary, Service-initiated changes in accounting methods
is navigating a course in uncharted waters.
For purposes of the overall and special accounting methods
, the determination is based on total assets and gross receipts (the same test as under current Regs.
The IRC section 481 adjustment for the accounting method
change is recognized over the period specified under revenue procedure 99-49--four years for most taxpayers.
97-27, relating to the rules for changing accounting methods
with the consent of the Commissioner.
For the first six months, income before the cumulative effects of changes in accounting methods
, recorded in the first quarter of 1992, increased 14.