Hi there,
For income tax purposes, if you want to commence accounting for your assessable income on an accruals basis, you include all assessable income earned for work done during the income year. This is even if you hadn't received payment by the end of the income year.
The ATO webpage choosing an accounting method advises if you are eligible to change accounting methods, you can contact us or ask your accountant to contact us on your behalf. Just a disclaimer this webpage is for GST to go from cash to non-cash method.
Changing from the cash method to the non-cash method can only take effect on the first day of a tax period.
In the first tax period after the change, you will need to account for sales or purchases that you have not previously accounted for or claimed.
This means that in the first tax period you use the non-cash method you need to:
- report the GST on any sales for which you had issued invoices before the date of the change but had not yet received payment
- account for the balance of GST on any sales that had been partly accounted for before the change.
You are also eligible to claim any unclaimed GST credits that you hold a tax invoice for in that first tax period.
You may contact the ATO for further information if you are still unsure as it isn't explicitly stated how to change accounting methods for income tax purposes on their business line.
Hope this helps
Wufflepuffle
***edited by moderator***
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