accrual method
Timing counts in financial reporting. Under the accrual method of accounting, the end of the accounting period serves as a strict “cutoff” for recognizing revenue and expenses. However, during the COVID-19 pandemic, managers may be tempted to show earnings or reduce losses. As a result, they may extend revenue cutoffs beyond the end of the…
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As year end approaches, it’s a good idea for calendar-year entities to review the guidelines for recognizing revenue and expenses. There are specific rules regarding accounting cutoffs under U.S. Generally Accepted Accounting Principles (GAAP). Strict observance of these rules is generally the safest game plan. The basics Companies that follow GAAP must use the accrual…
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The COVID-19 pandemic has had a significant impact on landlords. Many tenants have struggled to meet their financial obligations, often resulting in late or unpaid rent or negotiated lease modifications. As the end of 2020 quickly approaches, landlords should review the tax implications of their leasing activities. Cash versus accrual The tax impact of late…
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