general principles of commercial accounting

It is important to note that the income for purposes of taxation cannot be different from what is computed in accordance with the general principles of commercial accounting. Where substantial risks and reward in respect of a property sold are passed on to the buyer at pre-completion stage, revenue will have to be recognised immediately by adopting Percentage of completion method [POCM] even for tax purposes. Thus, when for example, the guidance note requires recognition of revenue by applying POCM, the same method should also be applied for the purpose of computation of taxable income.



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