Jones, Lang Salle Assignment | College Homework Help

Jones, Lang Salle, and Co is a public accounting partnership with eight partners, 15 employed salaried accountants, and 20 support and secretarial staff. The partnership has offices in North Sydney, Parramatta, and Newcastle.

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Although it is involved in some long-term projects, approximately 75% of turnover is represented by work taking less than three months to complete. Up to and including the year ended 30 June 2017, the partnership submitted its income tax returns on a cash received basis and the Commissioner assessed them on this basis.

Because of the increasingly complex nature of its activities, however, the partnership decided to submit its return for the year ended 30 June 2018 on an accruals basis.

Your advice is sought on the following matters:-

  1. (a) Must the Commissioner accept the altered basis for returning income? What are the relevant considerations?
  2. (b) For tax purposes, in which income year are fees which were earned but not received prior to 30 June 2017 regarded as having been derived?
  3. (c) What treatment should be adopted in respect of the value of work-in-progress (i.e., uncompleted work) at the end of 30 June 2018?

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