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New Zealand law explained for everyone

Income Tax Act 2007

Income - Adjustments

CH 4: Adjustment for change to accounting practice

You could also call this:

“How changing your accounting method affects money owed for tax purposes”

If you change how you do your accounting, it might affect the money you owe or that others owe you. This is important for your taxes.

If you have money that you owe to someone else, or if someone owes you money because of a change in your accounting, you need to pay attention to this rule.

The amount of money involved in this change, as worked out in [section EG 2(2)(a) or (3)(a)], is counted as your income. This means you might have to pay tax on it.

Remember, this rule only applies when the change in accounting affects money you owe or that’s owed to you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512853.

Topics:
Money and consumer rights > Taxes
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Part C Income
Adjustments

CH 4Adjustment for change to accounting practice

  1. This section applies when a person has, under section EG 2(2)(a) or (3)(a) (Adjustment for changes to accounting practice), an amount owing to them or an amount owed by them as quantified in those paragraphs.

  2. An amount quantified and allocated under section EG 2(2)(a) or (3)(a) is income of the person.

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