In financial statements prepared on the
accrual basis of accounting, employers should recognize a liability and expense for voluntary termination benefits (for example, early-retirement incentives) when the offer is accepted and the amount can be estimated.
The statement requires similar forms of termination benefits be accounted for in the same manner; specifies when governments should recognize the cost of termination benefits they offer in
accrual basis financial statements; provides an exception to the general recognition requirements for termination benefits that affect defined benefit post-employment benefits; and elaborates on how to measure the cost of termination benefits.
(The partnership is on the
accrual basis. The income from the receivables has already been recognized; thus, the receivables ate not "unrealized" receivables under Sec.
* Defer Year-End Bonuses:
Accrual basis C-corporations can deduct a current year bonus not actually paid to an employee if: (a) the employee does not own more than 50% in value of the corporation's stock, (b) the bonus is properly accrued on its book before the end of the current tax year, and (c) the bonus is actually paid within the first 2 1/2 months of 2002.
Before December 17, 1999,
accrual basis sellers using the installment method could pay the capital gains tax on their sale profits as they received the money from the buyer.
Nine steps for implementing full-cost accounting focus on details of how to convert modified accrual data to the
accrual basis.
The company continued to report its software-generated revenue on the cash basis, but reported its hardware income on the
accrual basis for tax and financial purposes.
Martin stressed the need to change the budgetary treatment of PBGC's accounting from a cash to an
accrual basis, citing the Pan Am example: "When PBGC lost over $600 million because of the termination of Pan Am's pension plans, it was reported in the federal budget for that year as a $10 million cost."
The 9th Circuit agreed section 267(a)(2) disallowed a deduction by an
accrual basis payor until the tax year in which the payee included the amount as income.
B neither altered its overall accounting plan for income and deductions on an
accrual basis, nor changed its basic accounting system for depreciation.