The ATO on Fri 7.2.2014, released ATO ID 2014/1 (Discharge of debt arising from the provision of services – changing from cash to accruals accounting). The ID deals with the following: Where the method of accounting changes from cash to accruals basis in an income year, does s 118-20 of the ITAA 1997 apply to reduce any capital gain made when a debt that arose from the provision of services in the previous income year is discharged? The ID says no.
[LTN 25, 7/2/14]