1. Jones, Lang Salle and Co is a public accounting partnership with eight partners, 15 employed salaried accountants and 20 support and secretarial staff. The partnership has offices in North Sydney, Parramatta and Newcastle. Although it is involved in some long-term projects, approximately 75% of turnover is represented by work taking less than three months to complete. Up to and including the year ended 30 June 2022, the partnership submitted its income tax returns on a cash received basis and the Commissioner assessed them on this basis. Because of the increasingly complex nature of its activities, however, the partnership decided to submit its return for the year ended 30 June 2023 on an accruals basis. Your advice is sought on the following matters:- (a) Must the Commissioner accept the altered basis for returning income? What are the relevant considerations? (b) For tax purposes, in which income year are fees which were earned but not received prior to 30 June 2022 regarded as having been derived?
1. Jones, Lang Salle and Co is a public accounting partnership with eight partners, 15 employed salaried accountants and 20 support and secretarial staff. The partnership has offices in North Sydney, Parramatta and Newcastle. Although it is involved in some long-term projects, approximately 75% of turnover is represented by work taking less than three months to complete. Up to and including the year ended 30 June 2022, the partnership submitted its income tax returns on a cash received basis and the Commissioner assessed them on this basis. Because of the increasingly complex nature of its activities, however, the partnership decided to submit its return for the year ended 30 June 2023 on an accruals basis. Your advice is sought on the following matters:- (a) Must the Commissioner accept the altered basis for returning income? What are the relevant considerations? (b) For tax purposes, in which income year are fees which were earned but not received prior to 30 June 2022 regarded as having been derived?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ss.138.
Transcribed Image Text:1. Jones, Lang Salle and Co is a public accounting partnership with eight partners, 15 employed salaried accountants and
20 support and secretarial staff. The partnership has offices in North Sydney, Parramatta and Newcastle. Although it is
involved in some long-term projects, approximately 75% of turnover is represented by work taking less than three months
to complete. Up to and including the year ended 30 June 2022, the partnership submitted its income tax returns on a
cash received basis and the Commissioner assessed them on this basis. Because of the increasingly complex nature of its
activities, however, the partnership decided to submit its return for the year ended 30 June 2023 on an accruals basis.
Your advice is sought on the following matters:-
(a) Must the Commissioner accept the altered basis for returning income? What are the relevant considerations?
(b) For tax purposes, in which income year are fees which were earned but not received prior to 30 June 2022 regarded as
having been derived?
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