Accounting date is the date on which a trade or business makes up its accounts. Accounting period is the period by reference to which a trade or business is chargeable. The accounting period of a trade or business commences when:
- a previous accounting period ends
- a trade or business commences to carry on a business
The accounting period ends when:
- 12 months from the start of the accounting period have expired
- where a trade or business does not make up the accounts for any period, the end of that period
- a trade or business ceases to trade
- a company goes into liquidation
- the liquidation of a company is completed
Note that the accounting year basis departure from the normal “preceding year” basis is only in respect of income from a trade, business, profession or vocation. Where income is derived from sources other than these ie employment, dividends, rents, etc, the strict preceding calendar year basis is applied.
The words “preceding year” do not in all cases refer to the previous calendar year. In the case of trades and professions, a taxpayer has a right to choose the accounting year which suits the particular business. This accounting year is also known as the financial year of the trade or business. Where a taxpayer prepares annual accounts to a date other than 31 December, and the Comptroller is satisfied that accounts are made up to that date regularly, the financial year ending in the year preceding the year of assessment is taken to be the basis period. In other words, the profits of the accounting year ending in the preceding year form the basis for assessment for the current year of assessment.
For more information on accounting services, please contact our friendly consultants. SingaporeAccounting.com also provides tax filing, payroll services for SME and MNC. Price list for packages are listed on Accounting Services Singapore Price.