Would the tax value method move the tax law further away from accounting principles?
An argument is that the tax value method would be further from an accounting treatment than is the current law. A: • The tax value method would not moving the law further away from accounting principles. • The tax value method’s definitions of `asset’ and `liability’ are based on accounting definitions. • Its `hold’ rules often mirror the effect of accounting’s control rules. • Its comparison of the opening and closing values of assets and liabilities reflects an accounting methodology. • Indeed, the tax value method testing showed that there were more adjustments to get to taxable income from accounting profit under the current law than using a balance sheet method under the tax value method. • Although tax value method-style asset and liability treatments can also be found in the current law, they are not employed systematically in the way they are in the tax value method. Further information • The Review of Business Taxation report A tax system redesigned noted that the tax value me
