STANDARDS FOR INCOME DETERMINATION.
A logical and coherent system of standards for income determination must be constructed if one has to judge the adequacy of income tax provisions for calculating income. If the economic concept of income is modified to fit practical business conditions and difficulties, it becomes a concept which is, in reality, a logical accounting conception. Since both economics and accounting deal with business, they should furnish the basic outline for determining taxable income. There appears to be sufficient reason for prescribing accounting methods, in general, for measuring income for tax purposes. Caution must be exercised, however, not to assume arbitrarily that income tax methods must conform in their entirety with accounting methods. Since a business enterprise measures its progress or retrogression by accounting methods, greater convenience, simplification, and cooperation will exist if taxable income is computed in the same manner rather than by an arbitrary or illogical statutory system. The methods followed by accountants and businessmen are tied up rather closely with economic facts and conditions, the tax system, likewise, should be so related.
- DOI
- 10.2308/tar-7036903
- Volume
- 19 (3)
- Pages
- 271-274
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref