Changes Proposed for “Cash Method” of Accounting

AnnouncementThe cash method of accounting is one that is commonly used by small and medium size business of all types. The simplicity of record keeping and reporting makes the cash method an attractive alternative.

However, a broad reaching tax reform plan recently introduced in the U.S. House of Representatives would make significant changes in which businesses would be allowed to utilize the cash method of accounting. The proposal from Representative David Camp, which is designed to simplify the rules on the cash method, would modify the gross receipts threshold that currently precludes some companies from using the cash method. Continue reading