Tax Accounting for Goods Sold on Credit

Abstract:     
Commissioner of Inland Revenue v. The Farmers’ Trading Company Ltd [1982] 1 NZLR 449 appears to be the first opportunity New Zealand’s Court of Appeal had to consider the rules of tax accounting for common-or-garden variety credit sales. Among the matters discussed in the article are the onus of proof where there is a long acceptance of a method of accounting and the process by which debt is valued. The article examines how the court dealt with the concept of “profits-emerging” accounting and speculates as to what the case may mean in the context of accounting for hire purchase transactions and credit fees.

Number of Pages in PDF File: 2

Keywords: Tax, credit sales, tax accounting, 'profits-emerging', hire purchase, credit fees

JEL Classification: K34

Accepted Paper Series