B2.611 Valuation of stock—general principles
For companies the profits of a trade must be computed in accordance with generally accepted accounting practice (GAAP)1.
For unincorporated businesses, from the tax year 2024/25, the cash basis is the default method of calculating profits or losses as long as the trade is not an excluded trade (see B2.111)2. There are specific rules3 which apply only for the purposes of calculating the profits using the cash basis. There is an option to elect to use GAAP instead4. Up to and including 2023/24 the default method of calculating profits or losses was GAAP for unincorporated trading businesses but there was an option to elect into
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Web page updated on 17 Mar 2025 17:30