Accounting principles' weight in tax determinations: accounting treatment persuasive but not determinative of taxable income recognition.
The evidentiary weight of accounting treatment in tax assessment has evolved from a rigid rejection of book entries as determinative to a view that consistent accounting and compliance with statutory presentation may be persuasive in ascertaining taxable income; this is particularly material for revenue recognition issues under AS 9 (including non performing assets and interest accrual), and where accounts comply with Parts II and III of Schedule VI the assessing officer's power to alter profits is limited except as allowed by the taxing statute. (AI Summary)