No! Absolutely not. It isn’t fair (nor legal).
By maria on April 19, 2017
Unless they are on some form value billing system with regular predetermined invoice amounts; service businesses, such as accounting or legal practices, need to track billable hours. Those hour that are not yet invoiced are work in progress and should be shown as such at the end of an accounting period. Just because it didn’t have to be shown in the past for tax purposes doesn’t mean it is not proper accounting procedure. Other business need to show it; so why not accountants.
By David Shelley on April 12, 2017
Seems CRA want to switch to cash accounting, if so, allows taxable income to be manipulated to suit the taxpayer. Bill Dec 31 or Jan 1, whichever is most beneficial tax wise.
Really a weird proposal to bypass GAAP. Something is hidden in the closet, and this is prep work to the real legislation.
By Ken on April 12, 2017
Since the costs involved in order to create the unbilled WIP amounts are expensed in the current year, the deferral of WIP creates a situation where costs are deducted and matching income is not recognized.
Can’t have it both ways. If the billing doesn’t happen in the future, that’s a bad debt.
By Alan Rowell on April 12, 2017
I think the government is making changes are not according to the accounting standards, which must be following. There are many situations there is work is not finished a the end of the year, this would need to be the business decision to claim the income or move it forward, because the claim may not make payment in this fiscal year. And may decide to live the professional and refuses to pay the bill.
By Ina on April 05, 2017
Work in Progress is just that. Unless a progress bill has been done or the job is complete and billed out, it should not be taxable. As well there are to many factors that can occur during work on a file that can impact the end result and the ultimate invoice.
By Chad on April 05, 2017