tailieunhanh - Publication 538 (Rev. December 2012) Accounting Periods and Methods

Third, information is better if it is more highly disaggregated (more detailed). For example, data on wastes produced by individual processes or product lines is better than data on wastes created by an entire factory. For instance, accounting that assigns a wide variety of costs to overhead is problematic because of a lack of disaggregation. Disaggregation is necessary to incremental financial analysis -- ., the evaluation of investment or production opportunities based on their incremental costs and incremental contributions to revenue. Without disaggregation it is more difficult for managers to differentiate between substitutes and identify the true cost of producing a product. . | Department of the Treasury Internal Revenue Service Contents Publication 538 Rev. December 2012 Cat. No. 15068G Accounting Periods and Methods Introduction .1 Reminders . 2 Accounting Periods . 2 Calendar Year . 2 Fiscal Year. 3 Short Tax Year. 3 Improper Tax Year . 4 Change in Tax Year .4 Individuals .4 Partnerships S Corporations and Personal Service Corporations PSCs . 5 Corporations Other Than S Corporations and PSCs . 8 Accounting Methods . 8 Cash Method . 9 Accrual Method .10 Change in Accounting Method. 20 Index . 24 Introduction Every taxpayer individuals business entities etc. must figure taxable income on the basis of an annual accounting period called a tax year. The calendar year is the most common tax year. Other tax years include a fiscal year and a short tax year. Each taxpayer must use a consistent accounting method which is a set of rules for determining when to report income and expenses. The most commonly used accounting methods are the cash method and the accrual method. Under the cash method you generally report income in the tax year you receive it and deduct expenses in the tax year in which you pay them. Under the accrual method you generally report income in the tax year you earn it regardless of when payment is received. You deduct expenses in the tax year you incur them regardless of when payment is made. 0This publication explains some of the rules for accounting periods and accounting methods. In some cases you may have to refer to other sources for a more in-depth explanation of the topic. Comments and suggestions. We welcome your comments about this publication and your suggestions for future editions. You can write to us at the following address Get forms and other Information faster and easier by Internet Oct 31 2012 Internal Revenue Service Business Exempt Organization and International Forms and Publications Branch SE W CAR MP T B 1111 Constitution Ave. NW IR-6526 Washington DC 20224 We respond to many .